IRLF 


37    377 


High  Cost 


Living 


Cause 
Remedy 


The  biggest  question  before  the  world  today  is  money- 
Other  questions  are  important  chiefly  as  they  bear  on  this 
overshadowing  problem 


High  Cost  of  Living 


CAUSE  — REMEDY 


By 

T.    GUSHING    DANIEL 

Author  of  Daniel  on  Real  Money 


If  a  people,  country,  state,  or  nation,  be  bonded 
for  all  the  assessed  value  of  its  property,  the  bond- 
holders and  not  the  people  are  the  owners  of  it 


Published  by 

THE   MONETARY  EDUCATIONAL  BUREAU 
Washington,  D.  C. 


COPYRIGHT,  1912 
BY  T.  GUSHING  DANIEL 
ALL  RIGHTS  RESERVED 

in  the  following  Countries :  United  States, 
Canada,  Mexico,  United  Kingdom  or  British 
Possessions,  France,  Germany,  Italy, 
Belgium,  Spain,  Switzerland,  Tunis,  Hayti, 
Luxembourg,  Monaco,  Norway,  Japan,  Den- 
mark, Sweden,  Liberia,  Russia  and  China 


NATIONAL  CAPITAL  PRESS,  INC. 

BOOK  MANUFACTURERS 

WASHINGTON.  D.  C, 


DEDICATED 

to  the 

Markers 

and 

leal  JJr0imter8  0f  the 
ttttlfe 


285885 


CONTENTS 

Evil  Effects  of  a  False  Money-System ...  5 

To  Overburden  the  Farmer  Is  to  Destroy 

the  Whole  of  Prosperity 

Bank  of  England 32 

Establishing  the  So-Called  Bank  of  the 

United  States 44 

1861 — War  Measures  to  Raise  Money.  .  .      52 
Government  Forestalled  in  Exercising  Its 
Highest  Act  of  Sovereignty  by  Banks 
Being  Given  the  Power  to  Issue  a  Sub- 
stitute for  Money 75 

National  Banks 87 

Analysis  of  the  Proposed  Morgan-Roth- 
.  ,  .  schildjSrAMrich    Money    Trust    Bill— 
Mishamfed  the  "National  Reserve  Asso- 

:  cm(iiQiii.(i)fthe  United  States" 93 

Morgan  -  Rothschilds  -  Aldrich  Money 
Trust  Bill — Now  Pending  in  Congress, 
and  Endorsed  by  "the  National  Mon- 
etary Commission" — the  Misuse  of  the 
Word  "Parity" — Their  Last  Hope  of 

Fooling  the  People 105 

Anglo-American  Money  Trust 122 

Loaning  of  Bank  Credits  and  Use  of  Clear- 
ing House  Certificates  as  a  Substitute 

for  Money 129 

The  American  Bankers  Association.  ...       135 

Panic  of  1907 146 

Responsibility  Rests  With  the  People ....       1 48 
The  Remedy 152 


EVIL   EFFECTS   OF   A   FALSE   MONEY- 

SYSTEM. 

HE  mental  attitude  of  our  whole 
people  has  been  so  affected  with 
skepticism  that  our  business  men 
can  no  longer  deal  with  them  in 
candor  and  fairness.  Yet  the  com- 
petition in  all  lines  of  business  has 
become  so  intense  that  it  forces  them  to  resort  to 
all  kinds  of  deception  in  order  to  get  a  mere  liv- 
ing and  meet  their  monied  obligations. 
CJThis  demoralization  reaches  the  professional 
class,  forcing  them  to  all  kinds  of  questionable 
practices  to  meet  the  high  cost  of  living.  Many 
of  them  are  living  dishonorably,  unable  to  gain 
their  self-approval,  without  which  life  is  a  fail- 
ure. 

t|  We  see  high  finance  in  a  John  D.  Rockefeller, 
head  of  a  trust  declared  by  the  United  States 
Supreme  Court  to  be  a  criminal  conspiracy. 
Yet,  when  forced  to  take  the  witness  stand,  he  is 
under  the  protecting  care  of  three  of  the 
reputedly  great  legal  luminaries  of  this  country, 
who  had  prostituted  their  intellects  for  money, 
to  keep  him  from  telling  the  truth  to  the  people. 
<fWe  then  see  the  guardians  of  high  finance 
represented  in  Joseph  H.  Choate,  a  former  am- 
bassador to  England,  Jno.  C.  Spooner,  an  ex- 
Senator  of  the  United  States,  who  had  ostensibly 
represented  the  people  most  of  his  life  in  the 
Senate,  and  Francis  Lynde  Stetson,  the  legal  ad- 
viser of  J.  P.  Morgan  in  trust  building  and  bond 
deals  against  the  United  States  Treasury.  This 
mighty  trio,  for  a  valuable  consideration,  appear 


6'       Evil  Eff  ects  of  a  False  Money-System 

against  the  interests  of  the  American  people  to 
see  that  a  partner  of  J.  P.  Morgan  &  Co.  does  not 
tell  the  whole  truth  before  a  Committee  of  Con- 
gress appointed  to  investigate  the  "Money 
Trust,"  affecting  the  circulating  medium,  that 
tneasures  the  value  of  the  property  of  every  man, 
woman  and  child  in  this  country. 
CJ  Yet  these  men  are  regarded  as  an  ornament  to 
the  legal  profession. 

^f  We  then  pass  to  the  highest  tribunal,  the  cita- 
del of  last  resort,  where  the  people  might  hope 
for  justice,  and  we  see  the  Supreme  Court  of  the 
United  States,  by  a  usurpation  of  power,  undo- 
ing the  will  of  the  people  as  embodied  in  an  act  of 
Congress  in  the  interest  of  the  trust  combinations 
and  against  that  of  the  people. 
CfThis  has  become  a  great  moral  as  well  as  eco- 
nomic question,  and  the  evil  effects  are  shown  in 
the  conditions  of  our  whole  people. 
IJWe  see  today  millions  crowded  into  our  big 
cities  where  it  is  a  physical  impossibility  for  them 
honestly  to  earn  enough  to  get  three  meals  a  day 
and  a  place  to  sleep.  A  great  many  in  moderate 
circumstances  realize  that  on  account  of  the  high 
cost  of  living  it  is  impossible  for  them  by  hard 
work  to  earn  enough  to  marry  and  establish  a 
home.  Therefore,  millions  of  them  live  in  un- 
holy relations  resulting  in  moral  degradation. 
tJVernon  M.  Cady,  lecturer  of  the  American 
Federation  of  Sex  Hygiene,  made  the  following 
statement  in  his  lecture  delivered  in  Washing- 
ton: 

CT'Mr.  Cady  declared  that  there  are  300,000 
registered  white  slaves  in  this  country  and  that 
the  police  of  the  various  cities  estimate  that  there 
are  one  million  more  not  registered.  He  declared 


Evil  Effects  of  a  False  Money-System        7 

that  every  moment's  delay  in  not  stamping  out 
the  white  slave  traffic  is  not  only  costly  to  society 
today  but  to  the  human  race  of  the  future. 
CJ  Home  is  the  foundation  of  our  moral  and  relig- 
ious life.  Home  is  the  atmosphere  of  character 
building,  and  all  conditions  should  conduce  to 
this  all-important  end. 

<JTo  multiply  happy  homes  is,  therefore,  the 
greatest  achievement  of  human  government  and 
is  essential  to  the  upbuilding  of  the  character  of 
a  people  without  which  all  forms  of  government 
will  inevitably  result  in  failure. 
€J  By  this  test  the  records  and  the  facts  already 
demonstrate  our  failure.  A  dishonest  and  eco- 
nomically false  money  system  has  created  arti- 
ficial conditions,  bringing  about  a  high  cost  of 
living  that  makes  it  a  physical  impossibility  for 
the  honest  young  men  and  women  of  today  to 
marry  and  establish  homes,  although  living  in  a 
land  of  almost  boundless  resources. 
CJThe  statesman,  so-called,  and  legislator  will 
look  upon  this  picture  and  admit  its  truth  and 
straightway  shift  the  responsibility  by  saying  it's 
a  moral  question  and  should  be  solved  and  reme- 
died by  the  Church. 

<JThe  Clergy  will  be  much  affected  and  preach 
Sunday  sermons  on  the  subject,  thereby  reliev- 
ing themselves  of  any  further  responsibility,  or 
by  saying  it  is  a  political  question  and  we  should 
not  meddle  in  politics. 

IJWhat  chance  does  the  religion  of  Christ  have 
as  a  moral  force  upon  the  people  surrounded  by 
such  conditions? 

<|  I  ask  those  who  have  assumed  the  sacred  obli- 
gation of  being  the  representatives  of  God  and 
responsible  for  the  preservation  of  the  Christian 


8        Evil  Effects  of  a  False  Money-System 

Religion,  as  taught  by  Christ,  and  the  salvation 
of  human  souls,  "What  answer  have  you  to 
make  for  these  conditions?" 
CJThis  has  become  a  vital  moral  as  well  as  eco- 
nomic question  that  no  man  on  this  earth  can 
neglect  and  perform  his  simple  duty  as  a  citizen. 
<|How  far  greater  is  the  responsibility  upon 
those  who  have  openly  dedicated  their  lives  to 
the  Christian  Religion  and  the  good  of  mankind! 
CJThe  cause  and  remedy  are  plainly  outlined  in 
this  production  and  a  call  is  made  upon  every 
honest  man  who  loves  his  family,  his  neighbor, 
his  country,  and  his  God,  to  put  the  remedy  in 
force.  The  people  must  save  themselves.  Their 
representatives  in  Congress  have  been  "weighed 
in  the  balance  and  found  wanting." 
<JThe  vital  question  to  be  determined  is:  Shall 
the  Government  be  controlled  by  the  people  or 
by  the  power  of  money?  It  is  therefore  a  matter 
of  deepest  and  most  widespread  importance  to 
the  whole  people  of  the  United  States  and  to 
their  latest  posterity. 

^  Under  the  present  system  we  have  become  a 
nation  of  debtors,  and  the  borrower  is  but  the 
servant  of  the  lender. 

<J  Millions  of  men  every  day  in  the  year  appear 
in  the  presence  of  the  money-lender,  not  as  a  free- 
man asking  for  the  use  of  money  for  which  he  is 
prepared  to  give  good  security  and  pay  the  law- 
ful rate  of  interest,  but  like  a  supplicant  asking 
for  favors  and  the  very  manner  of  condescension 
and  superiority  with  which  the  money-lender 
grants  the  loan  carries  with  it  an  implied  obliga- 
tion, the  borrower  must  be  good,  attend  strictly 
to  business,  and  be  in  sympathy  with  the  objects 
of  the  banks  or  he  will  lose  its  accommodation  in 
future. 


Evil  Effects  of  a  False  Money-System        9 

€}  Every  man  in  this  country  should  be  in  posi- 
tion to  demand  the  use  of  money,  the  medium  of 
exchange  for  all  properties,  as  a  right,  not  as  a 
favor,  and  he  who  has  land  be  able  to  borrow 
money  at  the  same  rate  of  interest  as  he  who  has 
bonds,  in  fact,  if  there  is  any  discrimination  it 
should  be  in  favor  of  the  real  producers  and  not 
in  favor  of  the  non-producers  or  bond-holding 
class. 

tj  In  contrast  to  this  we  see  millions  of  the  real 
workers  and  producers  cowering  in  the  presence 
of  the  money  changers,  a  class  which  the  people 
themselves  have  created  through  Congress  sur- 
rendering to  National  Banking  Corporations  the 
power  to  issue  a  credit  currency  whereby  they 
control  the  money-system  of  the  United  States. 
<JI  would  impress  upon  every  voter  that  real 
money  can  be  created  only  by  an  act  of  sov- 
ereignty, and  that  each  voter  is  an  individual  part 
of  that  sovereignty  as  a  creator  of  money  and 
obligates  himself  through  this  act  of  Congress 
to  redeem  this  money  in  his  services  and  prop- 
erty. 

SMy  earnest  purpose  is  to  make  every  man  in 
e  United  States  realize  his  importance  as  a  sov- 
ereign voter,  and  his  dignity  as  an  American 
citizen,  and  that  the  man  is  not  the  servant  of  the 
dollar  in  this  Republic;  but  its  creator  and  that 
his  property  is  more  important  than  money,  the 
medium  of  exchange. 

<J  It  should  be  borne  in  mind  that  the  value  of  the 
American  dollar  does  not  depend  upon  bankers 
or  gold,  but  upon  the  National  wealth  of  the 
United  States  created  by  the  people.  (An  ex- 
haustive treatment  of  this  subject  can  be  found  in 
Daniel  on  Real  Money — Last  Edition. ) 
€J  As  a  result  of  the  present  money-system  dis- 


1 0     Evil  Effects  of  a  False  Money-System 

criminating  in  favor  of  money-lenders — non- 
producers — gamblers  and  parasites,  the  popula- 
tion has  drifted  away  from  agricultural  pursuits 
— and  the  cities  are  overcrowded  with  non-pro- 
ducers. 

f|  One  of  the  direct  effects  of  the  remedy  herein 
given  would  be,  immediate  relief  and  encourage- 
ment to  the  agricultural  interests,  increase  the 
demand  and  value  of  farm  lands,  multiply  indi- 
vidual homes  of  real  producers — increase  the 
food  supply  and  reduce  the  high  cost  of  living. 
Business  communities  would  be  built  up  in  the 
different  agricultural  sections,  close  to  the 
sources  of  supply.  These  prosperous  communi- 
ties would  soon  be  linked  together  by  rapid- 
transit  facilities,  where  many  of  the  amusements 
of  the  city  could  be  reproduced  without  the  evils 
and  temptations  of  city  life;  thus  making  life  in 
the  country  far  more  attractive,  and  rapidly  in- 
crease its  population,  thus  relieving  the  con- 
gestion of  non-producers  in  the  cities. 
<JMen  would  then  prosper  according  to  their 
merit  and  not  according  to  their  ability  and  cun- 
ning to  overreach  each  other.  These  natural 
conditions  would  build  up  individual  character 
and  that  honest  American  manhood  which 
should  be  the  glory  of  our  civilization. 
i|It  would  relieve  all  classes  of  business  men 
from  that  anxiety  and  strain  put  upon  them  by 
the  uncertainty  of  being  able  to  get  money  when 
they  most  need  it  in  their  business,  or  to  protect 
the  valuable  equities  in  the  property  they  have 
acquired. 

<|  Every  man  should  read  this  book  and  call  the 
attention  of  others  to  it.  "Eternal  vigilance  is 
the  price  of  liberty." 


TO  OVERBURDEN  THE  FARMER  IS  TO 
DESTROY  THE  WHOLE  OF  PROS- 
PERITY. 


ET  us  get  away  from  theories  of  gov- 
ernments and  realize  once  for  all 
that  the  earth  supports  us  and 
whatever  embarrasses  and  retards 
its  productiveness,  which  is  the  be- 
ginning and  the  very  foundation  of 
all  wealth,  is  hurtful  to  the  human  family  and,  if 
continued,  destructive  of  any  form  of  govern- 
ment. 

^f  This  is  the  fundamental  great  economic  ques- 
tion now  before  the  world;  the  tariff  and  such 
issues  are  all  trivial  in  comparison.  It  makes  no 
difference  where  a  man  lives;  if  in  a  great  city, 
far  away  from  the  farm,  he  yet  bears  a  definite 
relation  to  a  certain  piece  of  land  that  feeds  him 
and  supports  him,  and  the  test  of  his  usefulness, 
from  an  economic  standpoint,  is  what  does  he 
put  back  into  the  store-house  of  the  world  as  a 
producer,  for  what  he  takes  out  of  it  as  a  con- 
sumer. This  being  a  self-evident  fact,  that  no 
sane  man  will  deny,  why  go  into  all  the  wild 
'speculative  theories  of  government  upon  which 
so-called  Statesmen  and  Politicians  ride  into 
office  and  live  upon  the  taxes  of  the  people? 
^fThe  Roman  Senate  made  laws  for  two  hun- 
dred years,  and  the  Roman  Republic  went  down 
in  ruin  from  congestion  of  its  people  in  large 
cities.  Thomas  Jefferson,  a  great  student  of  his- 


1 2  To  Overburden  the  Farmer 

tory  and  of  human  government,  fully  realized 
this  universal  economic  truth  and  said,  "Great 
cities  are  the  ulcers  upon  the  body  politic." 
IJThis  brings  us  face  to  face  with  the  greatest 
issue  of  history  and  the  cause  of  the  failure  of 
human  governments;  failure  to  keep  man  prop- 
erly related  to  the  soil.  Neglect  of,  and  discrimi- 
nation against,  the  agricultural  and  productive 
interests  through  the  operation  of  a  money  sys- 
tem altogether  favorable  to  the  development  of 
cities  and  non-producers,  and  in  favor  of  the 
manipulators  and  lenders  of  money,  human  para- 
sites, living  on  what  others  have  produced,  is  the 
great  economic  and  fundamental  cause  of  the 
failure  of  Governments.  We  are  now  face  to 
face  with  this  problem  in  the  United  States  and 
the  people  must  solve  it;  it  cannot  be  left  to  poli- 
ticians. 

<JWhen  in  Europe,  investigating  and  studying 
the  condition  of  the  people  in  agricultural  and 
industrial  occupations  and  realizing  the  condi- 
tions of  poverty  surrounding  them,  I  inquired  if 
they  were  giving  any  attention  to  the  money  sys- 
tem under  which  they  were  living.  I  found  they 
treated  it  as  a  question  with  which  they  had,  and 
could  have,  nothing  to  do.  I  felt  the  hopeless- 
ness of  their  condition  and  in  contrast  to  this  the 
possibilities  of  the  freemen  and  voters  in  the 
United  States,  who  have  it  in  their  power  to  alter, 
amend,  or  create  a  money  system  in  the  interest 
of  the  whole  people.  Yet,  when  I  realize  the  true 
condition  of  the  people  of  the  United  States  and 
see  that  above  90  per  cent  of  them  have  already 
become  debtors,  under  the  operation  of  the  same 
money  system, — Banks  of  Issue  emitting  credit 
money  and  every  conceivable  credit  device  to 


Is  to  Destroy  the  Whole  of  Prosperity      1  3 

multiply  debts  against  the  people,  upon  which 
they  are  directly  and  indirectly  paying  interest, 
I  realize  that  they  are  freemen  only  in  name. 
The  majority  spend  their  lives  in  debt,  working 
to  pay  interest  on  a  substitute  for  money,  issued 
through  the  operation  of  those  credit  con- 
trivances by  which  the  master  gathers  the  earn- 
ings of  the  man,  which  means  more  frescoes  in 
the  mansions  of  the  rich,  more  poverty  in  the 
rented  homes  of  the  real  workers  and  producers 
of  the  world.  We  can  now  fully  appreciate  the 
tremendous  significance  of  William  Pitt's 
prophecy. 

fl  He  made  the  following  statement  when  Alex- 
ander Hamilton  established  in  the  United  States 
the  first  Bank  of  Issue,  a  counterpart  of  the  Eng- 
lish Banking  system. 

CJ  "Let  the  American  people  go  into  their  debt- 
funding  schemes  and  banking  systems,  and  from 
that  hour  their  boasted  independence  will  be  a 
mere  phantom." 

If  There  never  has  been  a  time  in  the  history  of 
the  United  States  when  the  farmer  was  treated 
fairly  or  equitably  in  the  nature  or  management 
of  the  money  system  of  the  country.  Although 
he  has  applied  his  labor  to  the  earth,  the  basis  of 
all  wealth  and  general  prosperity,  in  times  of 
bad  seasons  when  he  needed  money  to  tide  him 
over  to  the  next,  or  when  he  must  buy  seeds  and 
farming  implements,  he  has  never  received  the 
use  of  money  upon  favorable  terms  as  to  time 
and  interest  charges,  often  having  to  execute  a 
mortgage  upon  his  farm,  at  heavy  expense,  for 
an  insignificant  amount  of  money  in  comparison 
to  the  real  value  of  his  property. 


1 4  To  Overburden  the  Farmer 

C|  Many  men  have  bought  farms  upon  the  same 
terms  that  a  man  buys  city  property,  one-third 
cash,  balance  in  equal  installments  of  1 ,  2  and  3 
years,  feeling  that,  after  they  had  improved  the 
farm,  they  could  at  least  carry  half  the  purchase 
price  in  a  mortgage  upon  the  property.  Loans 
are  carried  on  city  property  as  a  rule  at  60  per 
cent  of  their  selling  value.  On  hundreds  of  mil- 
lions of  stocks  originally  issued  upon  nothing  up 
to  95  per  cent,  the  value  of  the  property  having 
already  been  covered  by  a  first  mortgage  of  all 
that  it  is  worth. 

CJ  Yet  many  an  industrious  farmer,  after  spend- 
ing years  of  hard  labor  in  improving  his  farm,  has 
lost  it  and  his  home  forever  by  being  unable  to 
borrow  one-third  of  its  value  to  take  up  a  mort- 
gage falling  due.  Any  man  familiar  with 
money  conditions  knows  that,  if  he  buys  a  farm 
for  one-third  or  one-half  cash,  he  is  apt  to  lose  it 
unless  he  can  pay  the  entire  mortgage  when  it 
comes  due.  Thousands  have  tried  it  and  been 
sold  out,  and  had  to  move  to  cities. 
<|This  is  not  all;  after  he  has  taken  all  the  risks 
of  bad  seasons,  expending  a  large  part  of  his 
vitality  and  life  in  the  raising  and  gathering  of 
crops,  the  necessities  of  his  family  may  compel 
him  to  force  it  instantly  on  the  market,  as  he  has 
no  means  of  raising  money  in  any  other  way. 
^f  While  his  crops  are  in  the  ground,  the  specu- 
lator and  banker  in  the  large  cities  of  the  United 
States  are  preparing  their  plans  to  buy  them  at 
the  lowest  price,  having  the  facilities  to  borrow 
money  to  do  so.  The  crops  thus  bought  at  the 
lowest  price  are  placed  at  the  highest  for  the  con- 
sumers to  buy,  and  the  speculator  makes  the 
profits.  Without  this  facility  to  borrow  money 


Is  to  Destroy  the  Whole  o(  Prosperity      1  5 

in  the  city,  which  is  denied  to  the  farmers  in  the 
country,  the  speculator  could  not  take  this  ad- 
vantage of  both  farmer  and  consumer. 
<J  A  man  can  borrow  from  the  financial  institu- 
tions of  this  country,  on  any  securities  of  the 
trusts  in  which  they  are  interested,  up  to  90  per 
cent  of  their  fictitious  market  value.  A  man 
would  be  laughed  at  by  these  financial  institu- 
tions, or  told  a  financial  lie  and  refused  if  he 
wanted  to  borrow  one-half  the  value  of  a  farm 
he  wished  to  buy  in  order  to  become  a  real  pro- 
ducer. 

<J  More  than  this,  if  the  farmer  has  the  good  for- 
tune to  own  his  farm  free  of  mortgage,  he  has 
not  escaped;  at  the  beginning  of  the  season  he  is 
brought  face  to  face  with  the  fertilizer  trust  and 
he  is  asked  to  pay  his  proportion  of  the  interest 
and  dividends  on  the  superfluous  bonds  and 
stock  issued  by  this  trust.  After  taking  out  the 
extravagant  cost  of  management,  exorbitant 
salaries  for  officials,  and  the  pay  roll  of  all  of  its 
employees,  the  farmer  has  to  pay  his  proportion 
of  the  dividends  and  interest  on  the  stock  and 
bond  indebtedness  of  this  corporation. 
fJThe  International  Harvester  Trust  then  holds 
him  up  for  an  advanced  price  on  all  his  farming 
implements,  to  pay  the  same  charges  as  above 
enumerated,  high  salaries  and  wages,  and  divi- 
dends on  $120,000,000  of  stock.  George  W. 
Perkins  is  Chairman  of  the  Finance  Committee, 
and  the  trust  was  organized  by  J.  P.  Morgan  & 
Company. 

CJThe  farmer  has  not  yet  escaped  the  trust 
vampires.  At  the  freight  depot,  before  he  can 
get  his  crop  to  the  market,  the  freight  agent  of 
the  railroad  demands  that  he  shall  pay  his  pro- 


1 6  To  Overburden  the  Farmer 

portionate  part  of  the  dividends  and  interest 
charges  on  the  debts  of  the  railroad  system  rep- 
resented in  Bonds  and  Stocks  amounting  to 
$16,767,544,827. 

€J  Thomas  F.  Ryan,  a  close  business  associate  of 
J.  P.  Morgan,  the  organizer  of  the  great  railroad 
combinations,  testified  under  oath,  in  New  York, 
that  90  per  cent  of  the  stock  of  all  the  steam  rail- 
roads in  the  United  States  was  water. 
CJ  It  was  shown  by  Mr.  Daniel,  in  his  statement 
before  the  Interstate  Commerce  Committee  of 
the  Senate,  that  the  people  were  paying  $78,- 
000,000  annually  in  interest  and  dividends  to 
the  Steel  Trust  alone  in  the  high  prices  they  paid 
for  its  products. 

IJThe  farmer  deposits  the  net  balance  to  his 
credit  in  bank.  As  soon  as  he  begins  to  spend 
it,  he  finds  its  purchasing  power  has  been  dimin- 
ished; if  he  travels  on  the  railroad,  he  is  again,  in 
the  price  of  his  ticket,  paying  interest  and  divi- 
dends on  the  entire  debts  of  the  road;  and  a  like 
tribute  to  the  Flour  Trust,  Meat  Trust,  Sugar 
Trust,  Coffee  Trust,  Oil  Trust,  Steel  Trust,  Lum- 
ber Trust  (ad  infinitum).  And,  when  you  add 
to  this  the  general  rise  of  prices  caused  by  the  in- 
flation of  our  currency  system  with  every  known 
substitute  for  money  that  the  banker  and  finan- 
cier has  been  able  to  invent,  in  order  to  earn  in- 
terest on  ten  imaginary  dollars  for  every  real 
dollar  loaned,  it  will  be  seen  that  the  real  value, 
or  purchasing  power  of  the  dollar  has  been  taken 
from  it  by  the  operation  of  a  dishonest  money 
system,  without  which  none  of  these  evils  could 
have  existed. 

<JThus  the  farmer  has  paid  his  proportionate 
part  of  the  interest  and  dividends  on  all  the 


Is  to  Destroy  the  Whole  of  Prosperity      1  7 

paper  tokens  of  wealth  dishonestly  issued  by 
these  trust  combinations,  and  dishonestly  dis- 
tributed by  these  industrial  trust  promoters,  J. 
P.  Morgan  &  Co.  et  al. 

The  Farm  That  Feeds  Us  All. 

fJThe  following  statement  shows  the  value  of 
the  farming  industry  of  the  United  States: 

Value  of  land .  $28,475,674,000 

Value  of  buildings 6,325,452,000 

Value  of  implements  and  ma- 
chinery          1,265,150,000 

Value  of  animals,  poultry,  etc.       4,925, 1  73,000 


$40,991,449,000 

flit  is  estimated  that  about  $6,000,000,000  of 
money  are  loaned  on  the  farming  industry,  at  an 
average  interest  rate  of  8^  per  cent.  These  loans, 
as  a  rule,  are  made  for  comparatively  short 
periods,  and,  in  addition  to  this  high  rate  of  inter- 
est, the  farmer  is  subjected  to  heavy  renewal 
charges,  legal  expenses,  etc.  In  this  connection, 
it  should  be  remembered  that  the  earth  is  the 
economic  mother  of  us  all  and  therefore  should 
be  fundamentally  the  best  security  for  money, 
and  that  the  farmer  has  the  very  best  security 
for  current  loans  there  is  in  the  world,  namely, 
products  that  go  into  immediate  consumption, 
the  very  necessities  of  life,  that  sell  in  all  the 
markets  of  the  world,  every  day  in  the  year.  Yet 
he  pays  double  the  interest  that  a  speculative 
borrower  or  non-producer  pays  upon  the 
watered  stock  that  he  puts  up  as  collateral  for 


1 8  To  Overburden  the  Farmer 

loans  in  the  financial  institutions  in  the  cities, 
which  has  not  one  dollar  of  real  value  back  of  it. 
IJThe  farmers  in  France  and  Germany  obtain 
their  loans  at  about  one-half  the  rate  of  interest 
that  the  American  farmer  pays. 
€J  The  great  financial  institution  in  Paris,  known 
as  the  Credit  Foncier,  was  started  by  the  govern- 
ment support  in  1  852,  but  has  not  since  needed 
government  help  and,  from  that  time  till  the 
present,  has  been  steadily  making  loans  without 
interruption  from  panic,  war,  or  any  other  cause. 
tjlts  loans  at  the  present  time  amount  to  more 
than  $2,000,000,000.  The  loaning  rate  is  based 
upon  about  one-half  the  appraised  valuation  of 
the  farm  and  the  interest  rate  has  always  been 
less  than  5  per  cent,  and  this  year,  1912,  is  4^ 
per  cent. 

<|The  French  farmer  is  therefore  getting  his 
loans  at  about  one-half  of  what  the  American 
farmer  is  paying.  If  the  farmer  wishes  to  build 
upon  his  land,  he  can  obtain  a  mortgage  credit, 
based  upon  the  value  of  the  land  and  the  build- 
ings to  be  put  up.  This  is  a  building  loan;  when 
the  building  is  completed  its  cost  can  be  added 
to  the  loan. 

€J  The  farmer  can  borrow  on  a  time  loan  running 
from  one  to  nine  years  by  simply  paying  interest 
upon  the  loan,  or  he  can  borrow  for  a  period  of 
75  years  by  paying  upon  the  loans  very  small  in- 
stallments year  by  year.  In  January,  1912,  this 
financial  institution  offered  for  subscription 
$100,000,000  of  3  per  cent  bonds  in  denomina- 
tions of  fifty  dollars  each  and  running  to  seventy 
years.  It  was  over  subscribed  nineteen  times. 
There  was  more  than  $  1 ,900,000,000  of  French 
money  offered  to  the  Credit  Foncier  on  that  date 


Is  to  Destroy  the  Whole  of  Prosperity      19 

at  a  three  per  cent  rate  of  interest  for  seventy 
years,  to  be  lent  to  farmers  and  communities  by 
that  association. 

<J  I  would  call  special  attention  to  the  time  these 
loans  have  to  run,  in  contrast  to  the  short  periods 
given  the  American  farmer  and  the  uncertainty, 
anxiety  and  constant  renewal  charges  he  is  sub- 
jected to,  in  taking  care  of  his  loans.  In  the  case 
of  the  French  farmer,  he  enjoys  the  certainty, 
hopefulness  and  inspiration  that  a  man  feels  who 
owns  his  home  and  can  improve  his  farm  for  the 
benefit  of  his  family  and  his  children,  knowing  it 
is  his,  as  long  as  he  pays  even  the  small  rate  of 
4^  per  cent  interest  on  his  loan.  On  the  other 
hand,  the  American  farmer,  if  he  has  a  loan  upon 
his  property,  is  kept  in  a  continuous  state  of  un- 
certainty, always  apprehensive  that  his  mort- 
gage  may  not  be  extended,  and  feels  that  he  is 
periodically  at  the  mercy  of  the  money  lenders 
whenever  his  mortgage  becomes  due.  The  feel- 
ing that  he  may  lose  his  farm  and  all  improve- 
ments he  may  have  put  upon  it,  the  result  of  his 
life's  work,  depresses  his  spirits  and  robs  him  of 
that  hope  which  is  absolutely  necessary  to  suc- 
cess or  the  proper  enjoyment  of  life.  Under 
such  conditions,  is  it  at  all  surprising  that  men 
are  leaving  the  farm,  and  the  cities  are  being 
overcrowded? 

f|  By  referring  to  the  loans  made  to  the  farmers 
in  France,  or  in  any  other  reference  I  make  to  the 
foreign  Money  Systems,  I  do  not  mean  to  recom- 
mend to  the  United  States  to  imitate  them. 
France,  although  having  the  best  money  system 
in  the  world  at  present,  has  been  handicapped 
with  a  National  debt  now  amounting  to  $6,963,- 
953,193. 


20  To  Overburden  the  Farmer 

^Therefore,  she  has  been  unable  to  establish  a 
money  system  owned  absolutely  by  the  French 
Government,  although  she  does  control  the  man- 
agement of  the  Bank  of  France. 
€J  In  this  connection,  I  would  caution  the  Ameri- 
can farmer  not  to  be  misled  by  this  movement  to 
investigate  the  rural  credit  associations  of  Eu- 
rope in  order  that  they  may  be  imported  into  this 
country,  or  that  National  Banks  be  given  the 
power  to  loan  on  real  estate.  It  is  not  to  the  in- 
terest of  American  farmers  to  encourage  credit 
institutions  to  multiply  debts  on  the  farms  of  this 
country — as  has  already  been  done  by  the  trust 
combinations — on  the  industrial  resources  of  the 
United  States.  But  they  should  be  able  to  bor- 
row real  money,  not  credit,  and  their  first  object 
should  be  to  pay  off  the  debt  from  the  earnings 
of  the  farm  as  soon  as  possible,  and  be  really 
freemen,  not  in  debt  or  financial  bondage. 
<J  It  is  shown  by  "Daniel  on  Real  Money"  that  it 
is  only  necessary  for  the  United  States  to  estab- 
lish a  Money  System  in  accord  with  its  Constitu- 
tion, to  be  entirely  free  of  a  National  debt,  and 
the  Government  would  absolutely  own  and  con- 
trol the  proposed  Government  Bank  of  the 
United  States.  Agricultural  loans  could  then  be 
provided  for  as  follows: 


«4.60 


Call  Loans,  New  York 


American  Farm  Average 


What  it  costs  in  interest  for  What  it  costs  in  interest  for  a 

the  non-producer,  speculator  and  farmer   who  produces  the  neces- 

parasite    to    borrow    $1,000    on  sities  of  life  to  borrow  $1,000  for 

stocks  and  bonds  for  one  year.  one  year. 


Is  to  Destroy  the  Whole  of  Prosperity      2 1 
Agricultural  Loans. 

CJThe  tremendous  annual  increase  of  National 
wealth  as  the  result  of  the  work  of  the  real  pro- 
ducers, and  the  increase  of  the  population  of  the 
United  States,  calls  for  an  annual  increase  of  3 
per  cent  upon  the  total  stock  of  money  in  the 
currency  system  based  upon  the  average  increase 
per  annum  for  the  last  ten  years.  This  does  not 
include  other  substitutes  for  money  emitted  by 
banks  and  other  corporations.  This  increase 
should  be  issued  in  real  money  by  the  govern- 
ment and  the  people  have  the  full  benefit  of  its 
use,  as  they  are  responsible  for  its  redemption, 
and  all  credit  substitutes  for  money  issued  or 
emitted  by  corporations,  now  inflating  the  cur- 
rency system,  should  be  prohibited  by  law  under 
heavy  penalties.  As  the  total  money  now 
in  the  currency  system  of  the  United  States 
amounts  to  $3,214,000,000,  the  annual  in- 
crease would  be  $96,420,000.  This  money 
should  be  loaned  by  the  government  where  it  is 
most  needed,  in  the  agricultural  section  of  the 
United  States,  at  not  more  than  5  per  cent 
interest;  through  the  branches  of  the  pro- 
posed government  bank  (See  Daniel  on  Real 
Money),  also  using  in  this  connection  the  ma- 
chinery and  deposits  of  the  present  postal  sav- 
ings banks  in  the  thinly  settled  sections  of  the 
farming  communities.  There  is  no  reason  why 
the  percentage  of  farm  loans  should  not  be  based 
upon  fifty  per  cent  of  the  value  of  the  farm.  Fur- 
ther small  amounts  should  be  loaned  to  the 
farmer,  for  his  seasonable  needs,  by  his  obtain- 
ing the  endorsement  of  his  negotiable  note  by  a 
responsible  endorser.  The  interest  earned  by  the 


22  To  Overburden  the  Farmer 

government  on  all  loans  would  reduce  the  taxes 
of  the  people  in  supporting  the  government,  and 

Would  soon  amount  to  a  great  many  million  dol- 
lars, and  the  tariff  could  be  reduced  proportion- 
ately on  the  things  the  people  buy. 

Drift  to  Cities  Adds  to  High  Cost  of  Living. 

Consumers  Have  Increased  Faster  in 
United  States  Than  Producers. 

fl  Census  figures  now  at  hand  show  that  be- 
tween 1  900  and  1910  the  city  population  of  the 
United  States  increased  from  31,61 0,000  to  42,- 
632,000,  a  gain  of  34.8  per  cent.  During  the 
same  period  the  rural  population  increased  only 
1  1.2  per  cent,  or  from  44,385,000  to  49,349,- 
000.  Thus  it  appears  that  in  ten  years  the  popu- 
lation which  consumes  farm  products  increased  ' 
11,013,000,  while  that  which  produces  such 
products  increased  only  4,964,000. 

Sit  is  also  to  be  noted,  as  an  economic  factor, 
at  in  1  900  the  urban,  or  consuming,  popula- 
tion, was  1  2,775,000  persons  less  than  the  rural, 
or  producing,  population,  while  in  1  9 1 0  it  was 
just  the  other  way  about  to  the  extent  of  6,726,- 
000  persons.  Then,  too,  all  people  classed  in  the 
rural  population  are  not  engaged  in  agricultural 
pursuits. 

€j[  The  cereal  crops  for  1  899  were  grown  on  1  84,- 
982,000  acres.     For  1  909  the  acreage  in  cereal  ( 
crops  was  1  9 1 ,396,000  acres,  an  increase  of  only 
3.5  per  cent.     In  the  same  time  the  yield  of  the 
cereal  crops  increased  only  1 . 7  per  cent. 
CJFor  1  909  the  per  capita  production  of  cereals 
was    forty-nine    bushels,    or    more    than    nine 
bushels  less  than  it  was  ten  years  before;  but 


Is  to  Destroy  the  Whole  of  Prosperity      23 

comparing  the  two  years,  the  total  value  of  the 
cereal  crops  jumped  from  $1,482,600,000  for 
1899  to  $2,665,500,000  for  1909,  a  gain  of  80 
per  cent.  This  reflects  the  basic  cause  of  the 
higher  cost  of  food  supplies. 

<JLet  not  the  consumer  think  that,  because  the 
farmer  has  been  so  heavily  taxed,  the  con- 
sumer has  escaped — or  that  the  farmer  gets  the 
benefit  of  the  high  prices. 

^f  All  consumers  pay  the  extra  cost;  for  every 
excessive  burden  laid  upon  the  producer  is  ulti- 
mately paid  by  the  consumer. 
t|  The  same  pernicious  money  system  has  oper- 
ated to  the  disadvantage  of  every  legitimate  busi- 
ness in  the  United  States  and  has  resulted  in  high 
prices  to  all  the  people,  making  their  expenses 
run  ahead  of  their  income,  creating  discontent 
among  the  honest  workers  and  real  producers 
throughout  the  United  States,  all  the  result  of 
the  work  of  professional  bankers,  men  who  think 
of  money  as  something  to  lend  and  not  as  the 
circulating  fluid  of  the  country's  industrial  life. 
This  fundamental  economic  trouble  is  the  prime 
cause  of  all  of  our  industrial  ills  and  they  can 
never  be  eradicated  until  the  power  to  create  and 
regulate  money  is  exclusively  exercised  by  the 
Government  truly  representing  all  the  people; 
and  the  money  system  taken  out  of  the  hands 
of  men  who  are  incapable,  or  unwilling,  from 
self  interest  and  avarice,  to  realize  that  money 
to  circulate  and  not  money  to  loan  is  what  the 
industrial  well-being  of  the  country  needs. 
CJThe  money  lending  institutions  are  now  put- 
ting the  screws  on  the  borrowers  in  the  cities  as 
well;  increasing  the  rate  of  interest  on  real  estate 
loans  as  they  fall  due  and  exacting  commissions 


24  To  Overburden  the  Farmer 

ranging  from  1  to  5  per  cent,  and  in  many  cases 
exacting  all  the  borrower  is  able  to  pay — in  order 
that  his  overdue  mortgage  may  be  taken  care 
of  by  a  new  loan. 

CJ  A  large  majority  of  all  the  homes  and  rented 
houses  in  the  United  States  are  now  mortgaged, 
making  the  expense  of  home  owners  abnormally 
high,  but,  far  worse  than  this,  the  interest  on  the 
mortgage  is  putting  up  the  rents  on  all  the  people 
in  the  United  States  who  can  least  afford  to  pay 
such  increase.  Very  nearly  all  the  great  office 
buildings  and  apartment  houses,  etc.,  in  the  cities 
are  being  built  on  mortgages  as  speculative  en- 
terprises, and  the  interest  charges  are  figured  in 
the  rent  the  tenants  have  to  pay;  thus  making 
another  permanent  item  to  add  to  the  high  cost 
of  living. 

<f  In  the  United  States  it  has  become  at  times  a 
matter  of  buying  the  use  of  money,  and  the  in- 
siders, operating  with  the  loan  funds  of  the  insti- 
tutions, in  order  to  get  a  large  commission,  give 
preference  to  inferior  security  in  granting  loans. 
Many  of  them  are  no  longer  satisfied  with  a 
legitimate  rate  of  interest. 

tJMost  of  the  business  men,  and  independent 
corporations,  can  no  longer  be  sure  that  their 
outstanding  loans  can  be  renewed,  or,  if  renewed, 
what  rate  of  interest  they  will  have  to  pay  or  the 
commissions  that  may  be  exacted  of  them.  In 
fact,  if  they  were  called  on  for  settlement  during 
a  money  stringency,  fully  80  per  cent  of  them 
would  lose  their  equity  in  everything  they  have 
accumulated  during  their  lives. 
f|  Such  is  the  uncertain  condition  of  the  mind  of 
the  business  man,  when  he  contemplates  the  fu- 
ture, that  he  can  not  fail  to  be  discouraged  by  the 


Is  to  Destroy  the  Whole  of  Prosperity     25 

uncertain  and  precarious  condition  of  his  busi- 
ness and  property,  being  absolutely  at  the  mercy 
of  the  money  market  and  money  lender. 
If  In  other  words,  these  men  are  increasing  the 
prices  of  everything  consumed  or  used  by  the 
people  of  the  United  States  in  order  to  pay  not 
less  than  5  per  cent  interest  and  dividends  on  the 
debts  manufactured  under  the  operation  of  our 
present  money  system  as  evidenced  by  stocks 
and  bonds  aggregating  $70,000,000,000  making 
a  charge  upon  the  people  of  $3,500,000,000  an- 
nually and  this  is  not  the  sum  total  of  the  burden 
as  it  does  not  include  the  interest  on  billions  of 
dollars  loaned  on  real  estate  and  other  securities 
that  enter  into  the  high  cost  of  living. 


High  Cost  of  Living  or  a  Cheap  Dollar. 

1897— 100C    IJThe    American    dollar's    1904— 79c 

MR-  Qfir  Jh/inka^e  durinf  the  Jast  1905— 77c 
DC    fifteen     years     has     been 

IftQQ      oo_    thirty     cents.      Authority,    1906 — 73c 
United    Sates    Bureau    of    1907_69c 

1900— 81c    Labor. 

If  In     other     words,      the 

1901—  83c    value,    purchasing    power    1909 — 70c 

1902- 79C    of  the  American  dollar,  has    j910_g8c 
fallen   30  per  cent  in  the 

1903— 79c    last  fifteen  years.  1911— 70c 

CJThis  shows  the  cost  of  living  has  gone  up 
nearly  one-third. 

CJThe  Englishman's  dollar,  according  to  Sauer- 
beck, English  authority,  has  decreased  in  value 
or  purchasing  power  to  78  cents.  This,  the  era 
of  inflation  of  bank  credits  in  the  United  States 


26  High  Cost  of  Living 

and  Europe,  and  multiplication  of  debts,  the 
interest  and  dividends  upon  same  being  added  to 
the  cost  of  the  thing  sold  to  the  consumer,  adds  to 
the  high  cost  of  living. 

€JWe  will  first  take  inflation  of  the  currency. 
The  following  truism  from  John  Stuart  Mill, 
("Political  Economy") : 

The  value  of  money,  other  things  being  the 
same,  varies  inversely  as  its  quantity:  every 
increase  of  quantity  lowering  the  value,  and 
every  diminution  raising  it  in  a  ratio  exactly 
equivalent. 

f]f  General  Francis  A.  Walker,  "Money,  in  its 
Relations  to  Trade  and  Industry,"  chapter  1  : 

Money  is  to  be  known  by  its  doing  a  certain 
work.  Money  is  not  gold,  though  gold  may 
be  money;  sometimes  gold  is  money  and 
sometimes  it  is  not.  Money  is  no  one  thing, 
no  group  of  many  things  having  any  material 
property  in  common.  On  the  contrary,  any- 
thing may  be  money;  and  anything,  in  a  given 
time  and  place,  is  money,  which  then  and 
there  performs  a  certain  function.  Always 
and  everywhere,  that  which  does  the  money 
work  is  the  money  thing. 

IJ  If  the  reader  will  memorize  the  following  cor- 
rect definition  of  money  and  bear  it  constantly 
in  mind  he  can  clearly  understand  the  whole 
subject  of  money  as  an  economic  question  in 
contradistinction  to  the  credit  money  of  "Banks 
of  Issue"  and  find  exposed  the  greatest  financial 
curse  that  has  afflicted  the  people  of  the  world. 
^f  Money  is  so  much  value  embodied  in  a  circu- 


Or  a  Cheap  Dollar  27 

lating  medium,  which  constitutes  so  many  uni- 
versal orders,  which  the  people  agree  to  accept 
for  anything  they  own,  including  debts  and  serv- 
ices.   As  such  they  have  authorized  its  issue  by 
(their   sovereign   power,    the   Congress   of   the 
ftjnited  States. 

Cj  Originally  money  was  a  due  bill  issued  by  one 
person  to  another,  now  it  is  a  universal  order, 
issued  by  all  the  people  against  themselves,  and 
is  redeemable  in  the  entire  wealth  of  the  country 
and  the  services  of  all  its  people.  Originally  the 
lvalue  of  these  dollars  was  expressed  by  the 
physical  thing  being  stipulated  in  the  due  bill 
itself.  Since,  by  an  act  of  sovereignty  taking 
on  the  character  of  universal  orders,  money  is 
a  creation  of  law  and  thereby  declared  units  of 
value,  "American  dollars"  and  their  value  de- 
fends upon  the  quantity  of  dollars  out.  A 
proper  monetary  system  is,  therefore,  to  be 
regulated  by  the  number  of  dollars  issued  under 
the  authority  of  the  sovereign  power. 

Inflation  of  the  Currency  by  Banks  of  Issue. 

CfAll  substitutes  for  money,  such  as  bank 
credits,  clearing  house  exchanges,  traveller's 
checks,  issued  by  The  Bankers  Trust  Company, 
International  Mercantile  Marine  Co.,  Express 
Companies,  etc.,  are  inflating  the  currency,  by 
doing  the  work  of  money  and  have  the  effect  of 
|^n  enormous  increase  of  the  currency,  making  a 
cheap  dollar  and  high  prices;  which  means  High 
Cost  of  Living. 

fJThis  imposition  and  tax  upon  the  people  is 
being  felt  three  times  a  day  in  the  household 
tof  every  family.  The  protective  tariff  is  in- 
cidentally a  cause  of  higher  prices,  as  enabling 


28  High  Cost  of  Living 

the  manufacturers  to  exact  high  tributes  from  the 
people,  subsequently  the  trusts  by  combination 
he^ve  arbitrarily  advanced  on  the  things  they 
produce  and  sell.  But  the  present  question  of 
the  high  cost  of  living  has  now  outgrown  the 
tariff  and  finds  its  cause  and  support  in  the  infla- 
tion of  our  present  credit  money  system 
and  becomes  a  great  economic  question  in  com- 
parison with  which  tariff  and  trusts  are  subordi- 
nate and  mere  side  issues. 

CjfThe  voters  of  the  country  have  witnessed 
the  remarkable  spectacle  of  three  political 
parties  meeting  in  conventions,  nominating 
candidates  for  the  presidency  and  using  their 
combined  wisdom  in  drafting  platforms,  yet 
each  nominee  for  the  Presidency  of  the  United 
States  practically  admits  his  ignorance  of  the 
money  question  and  the  plank  of  each  party's 
platform  on  the  money  question  is  absolutely 
indefinite,  submits  no  plan  and  literally  means 
nothing. 

€f  More  than  this  not  one  of  them  treats  the  sub- 
ject of  money  as  a  great  economic  question  now 
before  the  voters  but  deal  in  vague  suggestions 
about  reforming  our  present  national  banking 
system  which  can  only  be  properly  characterized 
as  a  monumental  fraud  which  should  be  de- 
stroyed, not  reformed,  as  it  is  an  absolutely  in- 
defensible credit  system  whereby  Corporations 
issue  promises  to  pay  as  a  substitute  for  money 
based  upon  the  fraudulent  premise  of  gold  being 
a  standard  of  value.  This  fallacy  has  been 
thoroughly  exposed  in  Daniel  on  Real  Money. 

The  fair  and  logical  inference  from  the  evasion 
of  this  vital  question  by  those  who  would  be- 
come the  representatives  of  the  people  is  that 


Or  a  Cheap  Dollar  29 

they  are  still  mental  and  moral  cowards  on  this 
subject,  the  money  question;  all  apprehensive 
of  defeat  if  they  antagonize  the  money  interest 
and  lenders  of  money.  Those  advocating  the 
so-called  Gold  Standard  won  the  campaign  of 
1 896  and  an  act  of  Congress  was  passed  in  1  900 
to  permanently  establish  this  so-called  Gold 
Standard  in  the  United  States. 
CJIt  is  shown  in  Daniel  on  "Real  Money"  that 
this  was  the  consummation  and  culmination 
of  the  greatest  fraud  ever  perpetrated  on  the 
people  of  the  United  States.  Why  is  it  that 
none  of  those  posing  as  the  great  leaders  in  the 
three  parties,  all  of  whom  acknowledge  that  the 
times  are  out  of  joint  and  that  the  people  are 
being  imposed  upon  and  robbed  in  every  direc- 
tion by  the  high  cost  of  living  and  that  our  cur- 
rency system  needs  immediate  legislation,  are 
now  unwilling  to  state  whether  they  any  longer 
believe  in  this  so-called  Gold  Standard,  which 
is  made  the  basis  of  banking  corporations  mis- 
named National  Banks  of  the  United  States  issu- 
ing $7 1  1 ,099,938  of  their  promises  to  pay,  credit 
money  predicated  on  the  false  basis  of  gold. 
^  Every  one  of  them  know  if  they  have  given 
the  subject  of  money  any  study  that  would  en- 
title them  to  represent  the  people,  that  this 
$7 1  1 ,099,938  of  credit  money  should  be  replaced 
by  real  money,  legal  tender  money,  lawful 
money  of  the  United  States  issued  by  the  gov- 
ernment thereby  cancelling  $711,099,938 
of  government  bonds  and  relieving  the  people 
of  taxation  to  the  extent  of  this  $71  1,099,938 
to  pay  these  bonds  and  $2 1 ,000,000  interest  an- 
nually upon  same. 


30  High  Cost  of  Living 

<J  I  ask  the  practical  commercial  and  hard  head- 
ed voters  of  this  country  if  this  subject  is  not 
worthy  of  some  definite  expression  of  opinion 
by  those  who  represent  the  three  parties  asking 
for  their  votes. 

tj  It  is  clearly  shown  by  Mr.  Daniel  in  his  stateli 
ment  before  the  United  States  Senate  Commit- 
tee on  Interstate  Commerce  that  our  present 
money  system,  the  so-called  Gold  Standard  and 
its  manipulation  by  inside  rings  of  bankers  and 
promoters  is  the  creator  and  supporter  of  every 
trust  in  the  United  States  and  a  fraudulent  basis 
upon  which  banks  are  issuing  credit  money  and 
controlling  the  currency  system  of  the  United 
States. 

EFFECT.  ^ 

<JThe  effect  of  the  inflation  of  bank  credits  as 
a  substitute  for  money  acts  in  the  same  manner 
as  the  inflation  of  the  money  system  with  credit 
money,  such  as  national  bank  notes,  etc.  It 
has  the  effect  of  stimulating  business. 
^lt  can  be  readily  seen  that  after  the  country 
has  been  developed  into  a  high  state  of  pros- 
perity by  this  operation  of  banks  multiplying 
loans  against  the  borrowers  by  loaning  them 
their  credits,  prices  of  everything  advance  under 
this  operation  of  inflation  and  you  have  an  era 
of  high  cost  of  living.  m 

<}  Summary  of  the  present  situation.  The  offi- 
cial report  of  the  Comptroller  of  the  Currency 
for  1911  shows  the  amount  of  money  in  the  cur- 
rency system  to  be  $3,214,000,000,  while  the 
investment  of  all  banks  in  bonds,  stocks  and 
other  securities  total  the  tremendous  sum  of 


Or  a  Cheap  Dollar  3 1 

$5,05  1 ,900,000  and  in  addition  to  this  they  have 
made  loans  and  discounts  amounting  to  the 
fabulous  sum  of  $1  3,046,000,000. 
IJThis  gives  the  reader  an  idea  of  the  enormous 
inflation  and  loaning  of  the  credits  of  the  banks, 
as  a  substitute  for  money,  which  is  having  the 
effect  of  inflating  the  currency  and  abnormally 
raising  the  general  level  of  prices. 
€J  In  addition  to  this  and  in  violation  of  the  law 
which  reads,  "That  every  person,  firm,  associa- 
tion other  than  National  Bank  Associations, 
shall  pay  a  tax  of  ten  per  centum  on  the  amount 
of  their  notes  used  for  circulation  and  paid  out 
by  them,"  the  Clearing  House  Association  of 
New  York  issued  $101,000,000  of  Clearing 
House  certificates  in  1  907.  And  the  Express 
Companies,  Steam  Ship  Lines  and  the  American 
Bankers  Association  under  the  name  of  the 
Bankers  Trust  Company  of  New  York,  are  issu- 
ing millions  of  travellers  checks  as  a  substitute 
for  money,  and  thereby  inflating  the  currency. 
CJThe  present  money  system  of  the  United 
States  enabling  the  inflation  of  Bank  credits 
to  be  loaned  as  a  substitute  for  money  and  the 
emitting  of  credit  money  by  Banks  of  Issue  as 
substitutes  for  money  and  the  improper  control 
and  manipulation  of  the  currency  of  the  country 
and  the  use  of  it  by  the  men  promoting  the  trust 
combinations  have  manufactured  stocks  and 
bonds  amounting  to  over  seventy  billion  dollars 
upon  which  the  consumers  are  paying  the  in- 
terest and  dividends,  all  of  which  is  being  added 
to  the  price  of  the  things  they  consume  or  use. 


BANK  OF  ENGLAND. 

HERE  is  nothing  in  the  money  sys- 
tems of  the  old  world  worthy  of  our 
imitation.  It  is  only  necessary  to 
state  that  not  one  of  them  was  es- 
tablished upon  a  correct  basis  or  in 
the  interest  of  the  people.  As  the 
English  money  system  of  Banks  of  Issue  was  im- 
posed upon  this  Republic,  we  have  only  to  trace 
the  present  money  system  of  the  United  States 
from  its  Parent,  the  Bank  of  England.  The 
name  of  "Bank  of  England,"  adopted  like  that 
of  the  National  Bank  of  the  United  States,  was  a 
deception  and  fraud  upon  the  people  in  the  very 
start.  It  is  a  private  banking  corporation  trad- 
ing under  the  prestige  and  fictitious  credit  given 
it  by  the  use  of  the  name  of  the  Government;  im- 
properly given  and  used  by  the  bank  with  great 
profit  in  carrying  on  the  purely  money  making 
scheme  to  exploit  the  people. 
€|The  charter  of  this  corporation,  known  as  the 
Bank  of  England,  was  granted  July  27,  1694. 
The  charter  provided,  that  they  shall  "be  cap- 
able in  law,  to  purchase,  enjoy,  and  retain  to 
them  and  their  successors,  any  moneys,  lands, 
rents,  tenements,  and  possessions  whatsoever; 
and  to  purchase  and  acquire  all  sorts  of  goods 
and  chattels  whatsoever,  wherein  they  are  not 
restrained  by  act  of  Parliament,  and  to  grant,  de- 
mise, and  dispose  of  same." 

€J  "The  corporation  is  prohibited  from  engaging 
in  any  sort  of  commercial  undertaking  other 


Banks  of  Issue  33 

than  dealing  in  bills  of  exchange,  and  in  gold  and 
silver.  It  is  authorized  to  advance  money  upon 
the  security  of  goods  or  merchandise  pledged  to 
it,  and  to  sell  by  public  auction  such  goods  as 
are  not  redeemed  within  a  specified  time." 
€JThe  Charter  gave  this  private  banking  cor- 
poration no  authority  to  issue  bank  notes  as 
money. 

€J  But  it  is  the  same  old  story,  the  greed,  avarice 
and  cupidity  of  man,  working  and  operating 
through  the  instrumentality  of  a  corporation, 
well  described  as  an  entity  with  "No  back  side  to 
be  kicked  and  no  soul  to  be  damned." 
€|The  temptation  to  the  managers  of  this  bank 
was  too  great  to  resist  when,  in  the  course  of 
business,  the  opportunity  presented  itself, 
whereby  they  could  use  their  non-interest-bear- 
ing  notes  to  discount  the  borrower's  note  and 
draw  interest  on  same. 

<|A  reliable  historian  thus  describes  its  oper- 
ation : 

€J"Upon  such  considerations,  the  bank  decided 
to  issue  notes  payable  to  bearer  on  demand,  in 
exchange  for  individual  paper  payable  at  a  fu- 
ture day.  The  bank  thus  undertook  to  do  an  im- 
possibility, in  the  hope  that  it  would  not  be  called 
upon  to  redeem  the  promise  or  make  the  attempt. 
The  bank  had  not  the  money  and  could  not, 
therefore,  purchase  the  paper  offered;  the  notes 
offered  by  the  bank  were  not  money,  though  a 
much  better  substitute  for  money  than  the  notes 
of  individuals,  which  could  only  circulate  to  a 
very  limited  extent  as  a  medium  of  payment. 
The  bank  issued  notes  payable  to  bearer,  with- 
out endorsement,  which  added  to  their  facility 
in  passing  rapidly  from  hand  to  hand  as  cur- 


34  Origin  of  Our  Money-System 

rency.  It  departed  still  further  from  sound 
principles,  when  it  made  these  notes  payable  on 
demand  in  gold  and  silver;  for  it  must  be  con- 
trary to  sound  principles  to  undertake  to  do 
what  cannot  be  done.  The  bank  notes  were 
nothing  more  than  the  promissory  notes  of  the 
bank  to  circulate  among  those  who  chose  to  take 
them,  not  as  money,  but  a  promise  to  pay  money. 
And  the  promise  should  have  been  only  such  as 
the  bank  could  perform;  but  it  could  never  have 
been  imagined  for  one  moment,  that  by  this 
process  between  the  bank  and  its  customers  they 
manufactured  money." 

€J  "This  process  was  supplemented  by  the  bank 
depositing  the  proceeds  of  notes  discounted  to 
the  credit  of  the  party,  as  so  much  money  de- 
posited. It  mingled  a  process  of  cash  and  credit 
as  absurd  in  theory  as  it  was  dangerous  in  prac- 
tice." Thus  the  apparently  small  beginning  of 
issuing  their  notes  non-interest-bearing  for  those 
of  their  borrowers  bearing  interest,  is  the  per- 
nicious beginning  of  the  great  credit  money  sys- 
tem of  Bank  of  Issue  in  England,  and  engrafted 
upon  this  Republic  by  the  same  influences  under 
the  misleading  title  of  "National  Banks  of  the 
United  States."  All  of  which  has  been  paid  for 
since  by  the  people  of  England  and  the  United 
States  by  panics,  business  depressions,  causing 
untold  loss  and  injury  to  the  people  of  both 
countries. 

€J  All  this  was  inflicted  upon  the  people  upon  the 
same  old  theory  of  credit  money  or  bank  notes 
payable  on  demand,  without  the  money  in  hand 
to  do  it.  Upon  the  presumption,  of  course,  that 
the  bank  would  not  be  asked  to  pay  for  many 
of  them  at  any  one  time. 


Banks  of  Issue  35 

€|  This  error  of  the  Bank  of  England  is  the  parent 
of  the  evils  for  which  banks  in  more  modern 
times  are  answerable. 

CJThe  Bank  of  England  had  made  its  demand 
notes  payable  in  specie,  and  in  1 897  the  bank 
found  it  impossible  to  make  specie  redemptions, 
and  the  directors  in  alarm  appealed  to  the  Privy 
Council,  and  that  body  determined  on  the  27th 
of  February,  1 797,  "that  it  is  indispensably 
necessary  for  the  public  service,  that  the  Direc- 
tors of  the  Bank  of  England  should  suspend  cash 
payments  until  Parliament  can  act  for  its  pro- 
tection." Parliament  sanctioned  and  continued 
this  suspension  from  1  797  to  1  820,  or  a  period 
of  23  years.  I  would  call  the  attention  of  those 
who  oppose  full  legal  tender  money  being 
issued,  as  the  money  of  the  United  States,  to  the 
fact  that  the  people  of  Great  Britain  carried  on 
their  business  affairs  for  23  years  with  non-legal 
tender  paper  currency,  and  during  this  term, 
notwithstanding  the  great  expense  of  war,  and 
consequent  burdens  of  taxation,  Great  Britain 
increased  in  wealth  and  prosperity  more  than  at 
any  other  time  in  her  history. 
CJA  reliable  historian  describes  the  conditions 
as  follows:  "During  this  period,  notwithstand- 
ing the  vast  expenditures  of  war  and  the  burdens 
of  taxation,  Great  Britain  increased  in  wealth 
and  prosperty  more  rapidly  than  at  any  other 
period  in  her  history. 

€f  During  this  time  3,000,000  of  acres  of  unim- 
proved land  was  brought  under  cultivation,  and 
the  exportation  of  manufactured  Cotton  goods 
increased  in  amount  from  £7,000,000  in  1801 
to  £27,000,000  in  1822. 


36  Origin  of  Our  Money-System 

fj  All  classes  of  society  participated  in  the  gen- 
eral prosperity  which  prevailed  and  during  the 
entire  period  the  nation  never  once  suffered 
from  commercial  crash  or  money  panic." 
<J Resumption  of  Specie  Payments  in  1  823. 
if  At  this  date  the  money  lenders  forced  specie 
Resumption  on  the  people  of  England  and  the 
reader  should  retentively  remember  the  contrast 
— The  same  historian  states:  "Specie  payments 
were  accordingly  resumed  in  1823,  and  the  re- 
sumption was  accompanied  by  the  most  disas- 
trous commercial  crash  and  money  panic  that 
ever  visited  any  nation.  The  era  of  general 
prosperity  departed  to  return  no  more.  Real 
Estate  depreciated  largely  in  value  and  the  real 
estate  owners  of  the  kingdom  decreased  in  num- 
ber from  over  1  50,000  to  less  than  40,000;  busi- 
ness men,  merchants,  manufacturers,  etc.,  were 
ruined  by  the  thousand;  wages  were  reduced 
and  laborers  thrown  out  of  employment  by  the 
tens  of  thousands;  and  the  public  revenue  fell 
off  to  such  an  extent  that  payments  on  the  pub- 
lic debts  ceased  and  have  never  practically  been 
resumed.  Alison,  in  his  history  of  Europe,  says: 
"The  effects  of  this  extraordinary  piece  of  legis- 
lation were  soon  apparent.  The  industry  of  the 
nation  was  speedily  congealed,  as  a  flowing 
stream  is  by  the  severity  of  an  Arctic  winter. 
The  alarm  became  as  universal  and  widespread 
as  confidence  and  activity  had  recently  been. 
The  country  bankers,  who  had  advanced  largely 
on  the  stocks  of  goods  imported,  refused  to  con- 
tinue their  support  to  their  customers,  and  they 
were  forced  to  bring  their  stocks  into  the  market. 
Prices  in  consequence  fell  rapidly;  that  of  cotton, 
in  particular,  sank  in  three  months  to  half  its 


Banks  of  Issue  37 

former  level.  The  country  bankers'  association 
was  contracted  by  no  less  than  five  millions 
sterling  ($24,000,000);  and  the  entire  circula- 
tion of  England  fell  from  $235,545,000  in  1  81 8 
to  $1  74,385,000  in  1  820,  and  in  the  succeeding 
year  it  sank  as  low  as  $142,757,000.  *  *  * 
The  effects  of  this  sudden  and  prodigious  con- 
traction of  the  currency  were  soon  apparent,  and 
they  rendered  the  next  three  years  a  period  of 
ceaseless  distress  and  suffering  in  the  British 
Islands.  The  accommodation  granted  by  bank- 
ers diminished  so  much  in  consequence  of  the 
obligation  laid  upon  them  to  pay  in  specie,  which 
was  not  to  be  got,  that  the  paper  under  discount 
at  the  Bank  of  England,  which  in  1810  had  been 
$1  15,000,000  and  in  1815  not  less  than  $103,- 
000,000,  sank  in  1820  to  $23,360,000,  and  in 
1821  to  $13,610,000.  The  effect  upon  prices 
was  not  less  immediate  or  appalling.  They  de- 
clined in  general,  within  six  months,  to  half  their 
former  amount,  and  remained  at  that  low  level 
for  the  next  three  years.  Distress  was  universal 
in  the  latter  months  of  1819,  and  that  distrust 
and  discouragement  were  felt  in  all  branches  of 
industry  which  are  at  once  the  forerunner  and 
cause  of  disaster."  From  Mr.  Doubleday's  his- 
tory we  also  quote  as  follows:  "We  have  already 
seen  the  fall  in  prices  produced  by  the  immense 
narrowing  of  the  paper  circulation.  The  dis- 
tress, ruin  and  bankruptcy  which  now  took  place 
were  universal,  affecting  the  great  interests  both 
of  land  and  trade;  but  especially  among  land 
owners,  whose  estates  were  burthened  by  mort- 
gages, settlements,  legacies,  etc.,  the  effects  were 
most  marked  and  out  of  the  ordinary  course.  In 
hundreds  of  cases,  from  the  tremendous  reduc- 


38  Origin  of  Our  Money-System 

tion  which  now  took  place,  the  estates  barely 
sold  for  as  much  as  would  pay  off  the  mort- 
gages; and  hence  the  owners  were  stripped  of 
all  and  made  beggars."  Before  the  close  of  the 
year  1819  the  distress  became  insufferable. 
Great  meetings  were  held  throughout  England 
and  Scotland  during  the  summer.  In  August 
60,000  people,  men,  women  and  children,  as- 
sembled near  Manchester.  A  collision  occurred 
between  the  people  and  the  troops,  in  which  a 
number  were  killed  and  many  wounded.  This 
created  intense  excitement,  and  the  meetings  of 
the  people  held  in  Liverpool,  York,  Leeds,  and 
various  other  cities,  were  attended  by  vast  multi- 
tudes of  suffering  people,  demanding  vengeance. 
Serious  riots  occurred,  which  were  only  quelled 
by  military  force.  In  1 820  a  conspiracy  was  dis- 
covered, which  had  for  its  object  the  murder  of 
all  the  King's  Ministers,  and  which  was  only 
frustrated  through  the  cowardice  of  one  of  the 
conspirators,  who  betrayed  his  associates.  Mili- 
tary training  went  on  amongst  the  people,  and 
the  government  was  obliged  to  provide  a  large 
military  force  to  prevent  an  outbreak.  "On  Sun- 
day morning,  the  2nd  of  April,"  says  Alison,  "a 
treasonable  proclamation  was  found  placarded 
all  over  the  streets  of  Glasgow,  Paisley,  Stirling, 
and  the  neighboring  towns  and  villages,  in  the 
name  of  a  provisional  government,  calling  on  the 
people  to  desist  from  labor;  on  all  manufacturers 
to  close  their  workshops;  and  on  all  the  friends 
of  their  country  to  come  forward  and  effect  a 
revolution  by  force,  with  a  view  to  the  establish- 
ment of  an  entire  equality  of  civil  rights. 
Strange  to  say,  this  proclamation,  unsigned  and 
proceeding  from  an  unknown  authority,  was 
widely  obeyed.  Work  immediately  ceased;  the 


Banks  of  Issue  39 

manufactories  were  closed,  from  the  desertion  of 
workmen;  the  streets  were  filled  with  anxious 
crowds  eagerly  expecting  news  from  the  south; 
the  sounds  of  industry  were  no  longer  heard,  and 
two  hundred  thousand  persons  in  the  busiest 
districts  of  the  country  were  thrown  into  a  state 
of  compulsory  idleness  by  the  mandates  of  an 
unseen  and  unknown  power."  Five  thousand 
troops  were  immediately  assembled  at  Glasgow, 
and  the  insurgents  were  overawed.  Before  the 
end  of  the  year  the  government  had  increased 
its  volunteer  force  to  35,000  men.  " Without 
doubt,"  says  Alison,  "this  powerful  volunteer 
force,  organized  especially  in  the  manufacturing 
districts  at  this  period,  and  the  decisive  demon- 
stration it  afforded  of  moral  and  physical 
strength  on  the  part  of  the  government,  was  the 
chief  cause  through  which  Great  Britain  escaped 
an  alarming  convulsion." 

<|But  the  ruin,  suffering  and  misery  which  had 
attended  the  attempt  to  force  specie  payments 
could  not  be  undone,  nor  could  the  broken  for- 
tunes be  restored.  By  a  return  to  specie  pay- 
ments finally,  the  specie  basis  banking  and  credit 
system,  the  whole  tendency  of  which  is  to  con- 
centrate wealth  in  the  hands  of  the  few,  was  re- 
established; and  the  industrial  classes,  especially 
the  agricultural  class,  have  never  since  been  able 
to  recover  from  the  blow  then  received. 
if  In  1822  the  land  owners  of  England  numbered 
1 65,000.  According  to  the  census  of  1 86 1 ,  the 
number  was  about  30,000,  and  one-half  of  the 
whole  kingdom  is  now  owned  by  not  more  than 
twelve  persons. 

tjfln  1837  another  crash  and  money  panic 
occurred  in  England  which  also  involved  this 
country — When  the  bank  of  England  took 


40  Origin  of  Our  Money-System 

gold  from  the  United  States  to  supply  the  wants 
of  England,  the  banks  of  the  United  States  were 
obliged  to  suspend — Business  in  the  United 
States  was  brought  to  a  complete  stand  and  for 
three  years  the  American  people  were  left  with- 
out any  gold  and  were  consequently  obliged  to 
use  shinplasters." 

tfln  England  the  losses  were  so  enormous  and 
the  distress  so  great  that  it  required  another  act 
of  parliament  to  alleviate  the  suffering.  The 
same  historian  continues — "From  September 
7th,  1 844,  when  the  bank  was  reorganized,  to 
February  4th,  1  858,  it  altered  its  rate  of  inter- 
est fifty-six  times,  raising  it  from  time  to  time 
from  two  to  ten  per  cent,  in  an  effort  to  retain 
its  specie  in  its  vault.  This,  in  the  meantime, 
led  to  great  financial  embarrassment  and  a  panic 
was  only  averted  by  the  bank  suspending  specie 
payments  (October  23,  1847)  and  affording 
relief  by  issuing  irredeemable  paper.  In  1857 
having  ruined  the  merchants  and  business  of 
England,  it  was  again  obliged  to  suspend. 
Eleven  changes  in  the  rate  of  interest  were  made 
between  April,  1857,  and  January,  1858.  The 
bank  again  drew  upon  the  United  States  for 
gold,  causing  the  banks  to  suspend,  involving 
thousands  of  people  in  ruin  and  bankruptcies. 
€J  In  1 866  the  Bank  of  England  suffered  another 
suspension  in  consequence  of  the  war  on  the 
Continent  of  Europe;  but  this  time  the  United 
States  escaped.  Greenbacks  were  the  medium 
of  exchange,  and  the  nation  was  no  longer  at 
the  mercy  of  foreign  banks.  Gold  was  shipped 
abroad  to  the  amount  of  $45,000,000  and  sold 
as  a  commodity  at  a  high  price  for  the  use  of 
the  Bank  of  England  without  occasioning  the 


Banks  of  Issue  41 

slightest  ripple  in  the  business  affairs  of  the  coun- 
try." 

€J  In  1 844  the  poverty  and  distress  so  often 
brought  upon  the  people  by  the  bank  of  Eng- 
land made  necessary  an  act  of  the  government 
limiting  the  notes  that  the  bank  could  issue  to 
the  amount  of  government  securities  and  gold 
held  for  their  redemption;  the  bank  kept  on 
with  its  money  making  scheme  in  another  way. 
The  discount  of  commercial  paper,  entered  on 
its  books,  took  the  place  of  the  inflated  note 
issues,  but  these  discounts  called  largely  for 
gold,  therefore  when  there  was  the  least  drain 
on  the  banks  gold  set  in,  discounts  were  shut 
off,  interest  was  raised  and  quadrupled  and 
property  of  all  kinds  was  dumped  on  the  market 
to  pay  the  bank  in  money  for  the  discounted 
paper.  This  put  the  bank  in  a  position  to  in- 
crease its  possessions  out  of  the  losses  of  the 
people.  No  intelligent  man  can  fail  to  recognize 
in  the  above  a  perfect  picture  of  the  present 
National  banking  system  of  the  United  States. 
To  complete  the  picture,  I  will  quote  from  Mr. 
Seley,  of  London. 

€J*4The  commerce  of  the  country  is  now  in  the 
power  of  the  Bank  of  England,  as  it  was  before 
in  the  legislature.  For  legislative  enactment  we 
have  the  decision  of  the  Bank  Parlor;  for  a  re- 
sponsible government  we  have  substituted  an 
irresponsible  body  composed  of  twenty-four 
directors,  and  a  governor  and  deputy  governor. 
To  these  we  have  confided  the  commerce  of  this 
mighty  empire.  Instead  of  a  mercantile  system 
supported  by  merchants  and  manufacturers  and 
agricultural  interests,  we  have  now  the  mone- 
tary system  endangering  the  welfare  of  mer- 
chants, manufacturers,  and  agricultural  inter- 


42  Origin  of  Our  Money-System 

ests — for  the  benefit  of  the  fund-holding 
classes." 

<J  A  Bank  of  Issue,  in  the  final  analysis,  is  a  mere 
scheme  devised  by  the  avarice  and  cupidity  of 
man  to  reap  where  he  has  not  sown.  The  men 
organizing  the  Bank  of  England  thought  out  the 
plan  of  issuing  their  non-interest-bearing  notes 
for  the  time  notes  of  their  borrowers  bearing  in- 
terest in  order  to  make  something  out  of  noth- 
ing. 

€|The  whole  plan  being  based  upon  the  theory 
that  but  a  small  percentage  either  of  their  non- 
interest-bearing  notes  outstanding  or  the  credits 
allowed  the  borrower  on  their  books  would  re- 
quire the  banks  to  pay  out  at  any  one  time  a 
large  amount  in  cash  or  real  money. 
€|  Realizing  that  such  a  profitable  scheme  would 
not  long  be  tolerated  by  the  people  if  it  was 
made  plain  to  them,  that  a  corporation  was  mak- 
ing large  sums  of  money  out  of  them  by  loaning 
a  substitute  for  money,  or  in  other  words,  mak- 
ing money  out  of  a  creation  of  their  own  for 
which  they  had  given  no  valuable  considera- 
tion; yet  knowing  what  a  great  money  making 
scheme  they  had  devised,  their  next  thought  was 
how  they  could  perpetuate  it. 
<}The  issuing  of  their  own  non-interest-bearing 
notes  in  large  quantities  made  them  feel  their 
personal  risks  and  liabilities  for  what  might  hap- 
pen, as  they  knew  they  were  trying  to  accom- 
plish an  impossibility.  Like  all  men  doing  that 
which  is  illegal,  or  morally  wrong,  they  natur- 
ally thought  of  self  preservation,  and  in  order  to 
accomplish  this  and  still  keep  up  the  scheme, 
they  offered  to  redeem  their  notes  in  specie, 
thereby  making  the  responsibility  impersonal. 


Banks  of  Issue  43 

Realizing  they  could  never  redeem  them  on  a 
specie  basis,  they  shifted  the  responsibility  to 
the  English  Government  by  getting  the  govern- 
ment to  sanction  it;  knowing  that  if  the  govern- 
ment had  sanctioned  their  doing  an  impossible 
thing  the  government  would  have  to  come  to 
their  assistance.  This  being  the  case  the  bank 
frequently  suspended  specie  payments,  subject- 
ing the  people  many  times  to  tremendous  losses. 
While  the  ruin  was  going  on  among  the  people, 
the  Bankers  were  able  to  take  advantage  of  the 
great  fall  in  prices,  and  again  increased  their  pos- 
sessions of  property  and  securities  that  were 
forced  upon  the  market. 

€J  When  the  government  authorized  the  issue  of 
non-legal  tender  paper  money  to  supply  the 
wants  of  trade,  business  at  once  improved. 
CJWhen  prosperity  was  restored  by  the  use  of 
this  non-legal  tender  paper  money,  the  bank 
would  use  its  unfailing  influence  to  resume 
specie  payments,  which  meant  contraction  of 
the  currency,  a  fall  in  prices,  business  depres- 
sion and  panics,  and  again  widespread  ruin 
among  the  people,  and  another  harvest  for  the 
Banks. 

CJThis  operation  has  been  repeated  upon  the 
people  of  Europe  until  the  great  sub-strata  of 
society  there  have  been  reduced  to  hopeless 
poverty. 

CJKind  reader  and  voter,  just  keep  these  basic 
facts  in  your  mind.  This  is  the  fraudulent  basis 
of  "Specie  Redemption"  which  has  developed 
into  the  gold  brick  swindle  of  the  so-called  gold 
standard,  which  will  be  shown  to  be  the  greatest 
fraud  ever  perpetrated  on  mankind.  Nothing 
describes  it  but  this:  A  Gigantic  Confidence 
Game,  worked  upon  the  people. 


ESTABLISHING  THE  SO-CALLED  BANK 
OF  THE  UNITED  STATES. 

T  is  useless  to  consider  Continental 
currency  as  at  all  relevant  to  a  Na- 
tional Money  System.  Judge  Story 
describes  the  situation  after  the 
Revolution  as  follows:  "In  the  first 
place,  there  was  an  utter  want  of 
coercive  authority  to  carry  into  effect  its  own 
constitutional  measures.  It  may  be  called  a 
Government  which  possessed  no  one  solid  at- 
tribute of  power.  In  truth  Congress  possessed 
only  the  power  of  recommendation:  it  depended 
altogether  upon  the  good-will  of  the  States 
whether  a  measure  should  be  carried  into  effect 
or  not." 

€JIt  was  therefore  impossible  to  create  a  full 
legal  tender  dollar,  as  there  was  no  power  of 
sovereignty  to  bind  all  the  people  to  its  ac- 
ceptance, hence  it  was  impossible  to  establish  a 
universal  money  system  for  the  United  States  at 
that  time. 

CJ  In  order  to  understand  what  real  money  is,  the 
people  of  the  whole  world  should  expel  from 
their  minds  that  there  is  any  such  thing  as  a 
money  of  the  world,  or  international  money. 
CJ  Money  is  a  creation  of  an  act  of  sovereignty 
and  is  real  money,  legal  tender  money,  only 
within  the  jurisdiction  of  the  country  issuing  it. 
CJ  Hamilton  has  been  given  great  credit  by  su- 
perficial students  on  the  subject  of  money,  for  the 
part  that  he  performed  in  establishing  a  National 


A  Scheme  to  Exploit  the  People  45 

Banking  System  in  the  United  States,  but  to  any 
one  familiar  with  the  subject,  it  is  well  known 
that  Hamilton  originated  nothing  in  this  banking 
plan  of  his,  but  bodily  adopted  the  English  Bank- 
ing System  and  inflicted  it  upon  our  republican 
form  of  Government.  The  whole  mental 
process  of  the  man  was  undemocratic,  unrepub- 
lican  and  his  National  Banking  Scheme  was  a 
part  of  his  system  for  a  strong  centralized  gov- 
ernment and  the  rule  of  the  few,  the  rich  and 
well  born.  Hamilton's  whole  theory  of  govern- 
ment was  absolutely  wrong.  Its  foundation 
being  that  of  money  and  aristocracy,  two  abso- 
lutely discordant  elements  in  a  Republic.  In 
such  a  combination  money  dominates  and  the  in- 
evitable result  is  a  plutocracy,  the  worst  form  of 
government.  If  Hamilton  had  been  the  student 
statesman  of  history  that  he  claimed  to  be,  he 
should  have  known  the  poverty,  suffering  and 
ruin  this  same  credit  money  system  had  inflicted 
upon  the  great  mass  of  the  English  people,  and 
recognized  at  once  that  it  was  foreign  and  antag- 
onistic to  every  principle  of  our  republican  form 
of  government. 

fjln  1  780  the  American  conflict  had  resolved  it- 
self chiefly  into  a  rivalry  in  financial  ability  and 
resources  between  the  Mother  Country  and  the 
Colonies.  This  was  the  time  that  Hamilton 
began  to  set  forth  his  financial  scheme.  As  early 
as  this  he  wrote  an  anonymous  letter  proposing 
the  establishment  of  a  bank  to  be  called  the  Bank 
of  the  United  States.  Where  did  he  get  this 
idea? 

<|Now  mark  the  basis  of  its  establishment  as 
outlined  by  Hamilton,  and  you  have  the  answer. 
It  provided  "The  basis  of  this  institution  was  to 


46  The  Anglo-American  Bank 

be  a  foreign  loan  of  $200,000,000  as  a  portion 
of  the  bank  stock;  a  subscription  for  $200,000,- 
000  more  guaranteed  by  $10,000,000^of  specie 
or  by  a  bona  fide  equivalent  currency." 
C|  "The  bank  notes  were  to  be  made  payable  to 
the  bearer  in  three  months  at  1 0  per  cent." 
CJ  In  addition  to  this,  an  annual  loan  of  $  1  0,000,- 
000  was  to  be  furnished  to  Congress  by  the  bank 
at  4  per  cent.  This  plan  starts  out  with  the  out- 
rageous assumption  that  the  United  States  was 
not  to  exercise  its  right  of  sovereignty  and  create 
its  own  money  system,  but  at  once  become  a  bor- 
rower and  debtor  to  England  and  establish  a 
money  system  founded  upon  debt. 
€|In  April,  1781,  in  a  letter  to  Robert  Morris, 
Superintendent  of  Finance,  Hamilton  boldly 
asserted  the  principle  "that  it  is  in  a  National 
Bank  alone  we  can  find  the  ingredients  to 
constitute  a  wholesome,  solid  and  beneficial 
paper  credit."  To  show  that  Hamilton  was  in- 
terested in  this  kind  of  banks  he  wrote  the  Con- 
stitution of  the  Bank  of  New  York.  Half  a  mil- 
lion dollars  was  subscribed  at  a  single  meeting, 
and  Hamilton  was  chosen  one  of  its  directors. 
<J  Hamilton  was  also  chairman  of  the  committee 
on  peace  arrangements  between  the  States  and 
the  Mother  Country,  and  in  this  position  reported 
regarding  the  department  of  foreign  affairs.  The 
report  provided  that  the  secretary  of  that  depart- 
ment should  occupy  the  position  of  chief  of  the 
Diplomatic  Corps,  and  that  it  should  be  his  duty 
to  lay  before  Congress  such  plans  for  conducting 
the  political  and  commercial  intercourse  of  the 
United  States  with  foreign  powers  as  might  ap- 
pear to  him  to  be  best  adapted  to  promote  their 
interest. 


A  Scheme  to  Exploit  the  People  47 

CJ  The  subsequent  acts  of  Hamilton  show  he  was 
in  sympathy  with  the  financial  group  of  Eng- 
land. 

If  In  1  787,  when  the  Union  was  formed  and  the 
Constitution  adopted,  all  the  States  agreed  to 
surrender,  and  did  surrender,  control  over  the 
issue  of  money  in  order  that  this  sovereign  power 
might  be  vested  in  the  Congress  of  the  United 
States  representing  the  people  of  every  State  in 
the  Union,  in  order  that  a  uniform  and  stable 
money  system  might  be  established,  and  pro- 
vided for  same  in  the  Constitution  itself,  wherein 
Congress  was  given  the  exclusive  right  and 
power  to  create  and  regulate  the  value  of  money. 
<JThus,  if  Congress  authorized  the  issue  of  full 
legal  tender  money,  every  dollar  becomes  a  uni- 
versal order  for  all  things  on  sale,  all  service  for 
hire,  and  the  ultimate  of  payment  for  all  debts 
within  the  jurisdiction  of  the  United  States.  By 
this  means  every  money  unit  or  legal  tender  dol- 
lar would  have  squarely  back  of  it  the  entire  re- 
sources, national  wealth  and  services  of  all  the 
people  as  the  basis  of  its  continuous  redemption. 
<JI  will  now  show  how  the  entire  system  was 
perverted  and  set  aside  by  the  pernicious 
influence  of  those  who  established  the  so-called 
"National  Banks"  of  issue  in  the  United  States. 
It  was  simply  imposing,  under  a  different  name, 
the  European  money  system,  "a  Bank  of  Issue." 
A  reliable  historian  described  the  political  condi- 
tions in  the  United  States  at  that  time  as  follows: 
"At  the  time  the  Federal  Constitution  was 
framed  there  was  a  large  and  formidable  party 
with  aristocratic  notions  and  tendencies  under 
the  leadership  of  Alexander  Hamilton,  who  was 
in  favor  of  'a  strong  Government/  This  policy 


48  The  Anglo-American  Bank 

grew  out  of  a  want  of  faith  in  the  people,  and 
the  belief  that  they  were  incapable  of  self-gov- 
ernment." 

<][  Hamilton  expressed  his  conclusions  of  Gov- 
ernments as  follows: 

I  believe  the  British  Government  forms  the 
best  model  the  world  ever  produced,  and  such 
has  been  its  progress  in  the  minds  of  many 
that  this  truth  gradually  gains  ground.  All 
communities  divide  themselves  into  the  few 
and  the  many.  The  first  are  rich  and  well 
born;  the  other,  the  mass  of  the  people. 

tjfHe  then  states  that  the  rich  and  well  born 
should  govern. 

CJThe  money  power  of  the  world  has  never  been 
slow  to  single  out  such  men  for  their  service. 
CJ  England  and  her  money  lenders  saw  the  op- 
portunity for  money  lending  and  money  making, 
in  the  matchless  and  boundless  resources  of  this 
continent  and  determined  to  make  a  debtor 
country  of  the  United  States.  To  those  who 
know  the  direct  influence  they  did  exert  in  estab- 
lishing their  money  system  here,  it  was  not  at  all 
surprising  that  Hamilton  was  made  the  first  Sec- 
retary of  the  Treasury — and  at  once  strongly 
recommended  the  English  system  of  Banks  of 
Issue. 

CJ  On  the  13th  of  December,  1790,  Hamilton 
submitted  to  Congress  his  views  in  reference  to 
the  establishment  of  a  National  Bank,  and  from 
the  moment  of  its  incorporation,  and  the  forma- 
tion of  the  so-called  Bank  of  the  United  States, 
the  irrepressible  conflict  was  on  between  the 
money  power  represented  by  Hamilton  and  the 
Tories,  who  advocated  a  strong  centralized  Gov- 


A  Scheme  to  Exploit  the  People  49 

ernment  and  a  Bank  of  Issue,  and  the  people, 
represented  by  Thomas  Jefferson,  who  believed 
in  a  Government  of  the  people,  by  the  people  and 
for  the  people,  and  that  Congress  should  create 
money  and  regulate  the  value  thereof  in  the  in- 
terest of  the  people.  This  is  the  beginning  from 
which  the  issues  of  today  have  sprung.  Up  to 
the  present  time,  the  organized  money  power  has 
won  over  unorganized  democracy,  and  its  greed 
and  oppression  have  forced  the  money  question 
again  upon  the  people  for  a  correct  solution. 
<|  Through  Hamilton's  influence  Congress  char- 
tered the  first  so-called  Bank  of  the  United  States 
in  February,  1791,  with  a  capital  of  $10,000,- 
000  for  a  period  of  twenty  years. 
IJ  Thomas  Jefferson  as  Secretary  of  State  gave 
a  strong  written  opinion  denying  the  power  of 
Congress  to  incorporate  a  Bank  of  Issue.  Madi- 
son opposed  it  in  Congress  and  made  a  powerful 
speech  denouncing  it  as  a  violation  of  the  Consti- 
tution. 

€JIn  181.1  this  Bank  applied  to  Congress  for  a 
renewal  of  its  charter.  Henry  Clay  and  other 
leading  statesmen  defeated  it,  on  the  ground 
that  it  was  unconstitutional,  anti-American  and 
strictly  a  British  institution. 

<JThe  second  so-called  Bank  of  the  United 
States  began  business  the  first  of  January,  1817. 
In  1818  the  people  had  become  alarmed  at  its 
encroachments  upon  their  rights,  as  well  as  the 
evils  it  inflicted  on  the  public.  As  a  result,  the 
legislative  committee  of  the  State  of  New  York 
made  the  following  report  in  1818: 

Of  all  aristocracies,  none  more  completely 
enslave  a  people  than  that  of  money;  and  in 


50  The  Anglo-American  Bank 

the  opinion  of  your  committee,  no  system  was 
ever  better  devised  so  perfectly  to  enslave  a 
community  as  that  of  the  present  mode  of  con- 
ducting banking  establishments.  Like  the 
siren  of  the  fable,  they  entice  to  destroy. 
They  hold  the  purse-strings  of  society,  and  by 
monopolizing  the  whole  of  the  circulating 
medium  of  the  country,  they  form  a  preca- 
rious standard  by  which  all  the  property  in  the 
country — homes,  lands,  debts  and  credits,  per- 
sonal and  real  estate  of  all  description — are 
valued,  thus  rendering  the  whole  community 
dependent  upon  them;  proscribing  every  man 
who  dares  to  expose  their  unlawful  practices. 

<JOn   October   9,    1839,    the   second   so-called 
United  States  Bank  closed  its  doors. 
<|  Ben  ton,  in  his  history,  "Thirty  Years  in  Con- 
gress," states: 

An  hundred  millions  of  dollars  was  the 
lowest  at  which  the  destruction  was  esti- 
mated; and  how  such  ruin  could  be  worked, 
and  such  confidence  kept  up  for  so  long  a  time, 
is  the  instructive  lesson  for  history;  and  that 
lesson  the  report  of  the  stockholders'  commit- 
tee enables  history  to  give.  From  this 
authentic  report,  it  appears  from  the  year 
1 830  to  1 836 — the  period  of  its  struggle  for  a 
re-charter — the  loans  and  discounts  of  the 
bank  were  about  doubled — its  expenses 
trebled.  Near  thirty  millions  of  these  loans 
were  not  of  a  mercantile  character — neither 
made  to  persons  in  trade  or  business.  To 
whom  were  they  made?  To  members  of 
Congress,  to  editors  of  newspapers,  to  travel- 
ing politicians,  to  brokers  and  jobbers,  to 


A  Scheme  to  Exploit  the  People  5 1 

favorites  and  connections;  and  all  with  a  view 
to  purchase  a  re-charter. 

<JIt  is  shown  at  this  time  that  the  members  of 
Congress  were  not  only  improperly  interested  in 
this  bank  but  some  of  the  ablest  of  them  even 
then  apprehended  the  great  danger  to  the  Gov- 
ernment in  chartering  or  allowing  a  banking  cor- 
poration to  issue  a  substitute  for  money — Daniel 
Webster  had  declared  his  hostility  to  bank  cur- 
rency repeatedly,  as  "one  of  the  greatest  of 
political  evils,"  and  *'a  contrivance  for  cheating 
the  laboring  classes  of  mankind." 
<|  Henry  Clay  said  in  1811: 

I  conceive  the  establishment  of  this  bank 
(National  Bank)  as  dangerous  to  the  safety 
and  welfare  of  this  republic. 

Cf  Still  both  were  influenced  to  vote  for  the  re- 
chartering  of  this  Bank.  John  Randolph,  Sen- 
ator from  Virginia,  as  a  warning,  said: 

Charter  a  bank  with  thirty-five  millions  of 
capital;  let  it  be  established  and  learn  its 
power,  and  then  find,  if  you  can,  means  to  bell 
the  cat.  It  will  be  beyond  your  power,  it  will 
overawe  your  Congress  and  laugh  at  your 
laws. 


1861— WAR  MEASURES  TO  RAISE  MONEY 


HE  condition  of  the  United  States  at 
the  beginning  of  the  war  between 
the  States  1861.  The  crops  had 
been  unusually  good  and  the  people 
of  the  United  States  were  enjoying 
prosperous  conditions.  The  state 

of  the  banks  and  the  currency  in  1  86 1  was  as 

follows: 

Currency  in  circulation $202,000,000 

Deposited  in  Banks 257,200,000 

Loans 696,700,000 

Specie 87,600,000 

National  Wealth 1  6, 1  59,6 1  6,000 

War  Measures  to  Raise  Money. 

Cf  At  this  time,  and  during  an  extra  session  of 
Congress  July  1  7th,  1 86 1 ,  a  loan  act  was  passed 
authorizing  the  Secretary  of  the  Treasury  to 
borrow  $250,000,000  and  to  issue  coupon  bonds 
or  registered  bonds  or  Treasury  Notes  as  he 
might  deem  advisable. 

<|The  bonds  were  to  bear  interest  not  exceed- 
ing seven  per  cent  per  annum  and  they  were  to 
run  for  twenty  years.  The  Treasury  Notes  were 
to  bear  interest  at  seven  and  three-tenths  per 
cent  and  exchangeable  at  any  time  for  twenty- 
year  six  per  cent  bonds. 

<|By  an  act  of  August  the  5th,  1861,  supple- 
mentary to  the  act  of  July  1  7th,  1  86 1 ,  the  Secre- 
tary of  the  Treasury  was  authorized  to  issue 


Prevent  American  Money-System        53 

bonds  bearing  interest  at  six  per  cent  per  annum, 
payable  after  twenty  years  from  date  of  issue, 
which  might  be  exchanged  for  Treasury  Notes 
bearing  seven  and  three-tenths  per  cent  interest. 
I  desire  to  call  special  attention  to  these  acts  of 
Congress,  for  in  them  is  contained  conclusive 
evidence  that  the  European  and  American 
monied  interests  were  laying  their  plans  to  fore- 
stall the  Congress  of  the  United  States  from  ex- 
ercising its  right  of  sovereignty  to  create  full 
legal  tender  money  in  the  interest  of  the  people 
and  establish  an  American  Money  System.  The 
Treasury  Notes,  described  in  this  Act  of  Con- 
gress, were  handicapped,  if  not  destroyed  as  a 
circulating  medium,  by  being  turned  into  a 
seven  and  three-tenths  per  cent  investment  for 
money,  and  in  the  subsequent  Act  of  Congress 
made  convertible  into  a  six  per  cent  United 
States  Bond,  which  would  eventually  retire  them 
as  a  circulating  medium,  making  way  for  the 
issue  of  Bank  Notes — The  English  Money  Sys- 
tem. The  subsequent  acts  of  the  money  power 
in  depreciating  the  value  of  these  Treasury 
Notes  and  the  non-legal-tender-notes  (green- 
backs so  called),  and  converting  them  into 
bonds  is  conclusive  evidence  of  the  fact. 
<}This  form  of  Treasury  Note,  bearing  interest 
and  not  a  legal  tender,  is  really  only  an  evidence 
of  indebtedness  and  differs  only  in  form  from 
a  bond.  No  private  person  or  corporation  is 
obliged  to  accept  it  at  its  face  value  in  payment 
for  debt,  services  or  property;  it  therefore  lacks 
the  essential  qualities  of  money  as  a  circulating 
medium. 

CJThe  fact  that  it  bears  interest  and  is  payable 
for  specific  dues  or  taxes  to  the  Government 


54         Anglo- American  Money  Lenders 

does  not  help  it  in  its  use  as  money,  but  offers 
a  premium  to  those  who  have  obligations  to  pay 
to  depreciate  its  value  in  order  to  purchase  them 
at  a  low  price. 

^f  Just  as  was  done  by  the  bullionists  when  they 
discredited  and  depreciated  the  greenbacks— 
non-legal  tender  notes — as  they  had  cornered  the 
gold,  it  was  to  their  interest  to  buy  greenbacks, 
with  gold,  as  cheap  as  they  could,  and  then  ex- 
change them  at  their  face  value  for  United 
States  six  per  cent  bonds.  This  was  the  begin- 
ning of  their  plan  to  establish  banks  of  issue  to 
emit  credit  money  based  on  debts  under  the 
title  of  "National  Banks  of  the  United  States" 
which  has  developed  into  the  present  money 
trust.  As  additional  evidence,  I  will  submit  the 
legislation  in  the  interest  of  the  people,  which 
they  subsequently  defeated  in  Congress,  to  issue 
legal  tender  money. 

Legal  Tender  Act. 

€J  Introduced  in  the  House  of  Representatives 
December  30,  1861.  Duly  considered  by  the 
"Committee  on  Ways  and  Means"  and  on  Janu- 
ary 7,  1862,  reported  from  the  Committee  to 
the  House. 

IJThe  Bill  authorizing  the  Secretary  of  the 
Treasury  to  issue  on  the  credit  of  the  United 
States  $100,000,000  Treasury  Notes  full  legal 
tender  for  all  debts  public  and  private. 
tfThis  was  an  honest  attempt  to  establish  an 
American  Money  System,  as  provided  in  the 
Constitution,  and  issue  full  legal  tender  dollars 
as  the  currency  of  the  people  of  the  United 
States.  This  bill  was  no  sooner  made  public  than 


Prevent  American  Money-System        55 

an  organized  effort  was  made  by  the  monied  in- 
terest, represented  by  the  Bankers  of  New  York, 
Boston  and  Philadelphia,  to  kill  it.  They  at  once 
said  that,  if  a  full  legal  tender  American  dollar 
was  authorized  and  issued  by  the  sovereign 
power  of  the  Congress  of  the  United  States,  it 
would  be  the  beginning  of  a  permanent  money 
<3ystern  in  the  interest  of  the  people  of  the  United 
States,  and  not  in  the  sole  interest  of  bankers 
and  bullionists.  They  saw,  if  this  Bill  became  a 
Law,  it  would  deprive  them  of  the  power  to 
shave  either  the  government  or  the  people. 
These  bankers  organized  themselves  into  a  dele- 
gation, hurried  to  Washington,  organized  their 
forces  in  a  formal  manner  and  invited  the 
"Finance  Committee  of  the  Senate"  and  the 
"Committee  of  Ways  and  Means  of  the  House" 
to  meet  them  in  the  office  of  the  Secretary  of 
the  Treasury  of  the  United  States,  January  1  1  th, 
1 862.  The  meeting  was  held  and  they  entered 
their  vigorous  protest  against  this  bill  and  sub- 
mitted their  own  plans  as  a  substitute  from 
which  I  quote  the  following  sections. 
CJ1.  "A  tax  bill  to  raise  125,000,000  dollars 
over  and  above  duties  on  imports  by  taxation." 
€|2.  "Not  to  issue  any  demand  Treasury  notes, 
except  those  authorized  at  the  extra  session  of 
July  last." 

<J3.  "A  suspension  of  the  sub-treasury  act,  so 
as  to  allow  the  banks  to  become  depositories  of 
the  Government  of  all  loans,  and  to  check  on 
the  banks  from  time  to  time  as  the  Government 
may  want  money." 

<f  4.  "Issue  six  per  cent  twenty-year  bonds,  to 
be  negotiated  by  the  Secretary  of  the  Treasury, 


56         Anglo-American  Money  Lenders 

and  without  any  limitation  as  to  the  price  he 
may  obtain  for  them  in  the  market." 

€|5.  "That  the  Secretary  of  the  Treasury  be 
empowered  to  make  temporary  loans  to  the  ex- 
tent of  any  portion  of  the  funded  stock  autho- 
rized by  Congress,  with  power  to  hypothecate 
such  stock,  and,  if  such  loans  are  not  paid  at 
maturity,  to  sell  the  stock  hypothecated  for  the* 
best  market  price  that  can  be  obtained." 
<}The  following  statement  in  regard  to  this 
proposition  was  printed  in  the  "New  York  Trib- 
une" of  January  13th,  1862. 

CJ*'The  Sub-Committee  of  Ways  and  Means 
objected  to  any  and  every  form  of  * 'shinning" 
by  the  Government  through  Wall  or  State 
streets  and  the  knocking  down  of  Government 
Stocks  to  75  or  60  cents  on  the  dollar,  the  in- 
evitable results  of  throwing  a  new  and  large 
loan  on  the  market  without  limitation  as  to  price, 
and  finished  by  firmly  refusing  to  assent  to  any 
scheme  that  should  permit  a  speculation  by 
brokers,  and  bankers  and  others,  in  the  Govern- 
ment securities  and  particularly  any  scheme 
which  should  double  the  public  debt  of  the 
country,  and  double  the  expenses  by  damaging 
the  credit  of  the  Government." 
CJThis  bankers  delegation  remained  in  Wash- 
ington several  days  and  went  into  further  con- 
sultation with  Secretary  Chase,  which  resulted 
in  an  agreement  with  him  that  Congress  should 
be  urged  to  pass  the  National  Bank  Bill  and  that 
the  amount  of  the  demand  notes  already  issued 
by  the  Secretary  of  the  Treasury  should  not  be 
increased  beyond  the  50,000,000  dollars 
authorized  by  the  Act  of  July,  1861,  and  also 
that  Congress  should  be  urged  to  extend  the 


Prevent  American  Money-System        57 

provisions  of  the  existing  loan  act  so  as  to  enable 
the  Secretary  of  the  Treasury  to  exchange  in- 
terest bearing  Treasury  Notes  for  the  demand 
notes,  not  bearing  interest  and  get  them  out  of 
the  way. 

Influences  of  Bank  of  England  and  the 
Rothschilds. 

CJ  An  able  writer  on  this  legislation  comments 
as  follows: 

<J"Here  begins  one  of  the  darkest  chapters  in 
American  history.  It  will  be  found  that  every 
step  taken  by  Congress  from  this  on,  in  matters 
pertaining  to  the  finances  of  the  nation,  has  been 
dictated  by  the  money  power.  Foreign  capital- 
ists, such  as  the  Rothschilds,  became  deeply  in- 
terested in  the  scheme  of  robbery  inaugurated 
by  the  passage  of  this  Act,  and  through  their 
agents,  such  as  August  Belmont,  Banker  and 
whilom  chairman  of  the  Democratic  National 
Committee,  have  aided  the  money  power  here 
materially  in  controlling  the  policy  of  both  of 
the  great  political  parties.  The  amount  stolen 
from  the  people  during  the  war  by  the  financial 
policy  then  adopted,  and  which  now  encumbers 
the  nation  in  the  shape  of  a  bonded  debt,  pay- 
able principal  and  interest  in  gold,  is  estimated 
by  such  writers  upon  the  subject  of  finance  as 
J.  S.  Gibbons  (contributor  to  Johnson's  Univer- 
sal Cyclopedia)  at  over  one  thousand  million 
dollars,  to  say  nothing  of  the  thousands  of  mil- 
lions of  which  the  people  have  been  robbed  in- 
directly, by  means  of  the  pernicious  monetary 
system  then  foisted  upon  the  country." 


58         Anglo- American  Money  Lenders 

€J  It  is  a  well-known  fact  that  the  Rothschilds 
were  back  of  the  drain  on  American  gold  and 
silver  from  1851  to  1 863 — when  nearly  $480,- 
000,000  went  out  of  this  country.  And  again 
from  1864  to  1876,  when  nearly  $770,000,000 
followed. 

<|The  British  Parliament  declared  all  colonial 
acts  for  the  issue  of  paper  currency  to  be  void. 
<|The  British  Board  of  Trade  also  strongly  ob- 
jected as  early  as  1  764  to  the  use  of  legal  tender 
money  in  the  colonies,  both  realizing  it  would 
render  the  colonies  independent  of  the  power  of 
Great  Britain.  The  false  basis  of  their  objec- 
tion being  "every  medium  of  exchange  should 
have  an  intrinsic  value,  which  paper  has  not." 
Such  has  always  been  the  attitude  of  England 
on  money. 

<|Thaddeus  Stevens,  Chairman  of  the  Ways 
and  Means  Committee,  in  charge  of  the  Legal 
Tender  Bill,  concluded  his  speech  as  follows: 
if  "We  believe  that  the  credit  of  the  Country 
will  be  sustained  by  it,  that  under  it  all  classes 
will  be  paid  in  money  which  they  can  use,  and 
that  it  will  confer  no  advantage  on  the  capitalist 
over  the  poor  laboring  man.  If  this  bill  shall 
pass,  I  shall  hail  it  as  the  most  auspicious  mea- 
sure of  this  Congress;  if  it  should  fail,  the  result 
will  be  more  deplorable  than  any  disaster  which 
could  befall  us." 

<|This  Bill  passed  the  House  February  6,  1 862, 
by  a  vote  of  93  to  59.  On  February  1 4,  1  862, 
the  Bill  passed  the  Senate  with  the  following 
amendments: 

<|  1 .  That  the  legal  tender  notes  should  be  re- 
ceivable for  all  claims  and  demands  against  the 
United  States  of  every  kind  whatever,  "except 


Prevent  American  Money-System        59 
for  interest  on  bonds  and  notes,  which  shall  be 

•  1   •  •        99 

paid  in  com. 

fj  2.  That  the  Secretary  might  dispose  of  United 
States  bonds  "at  the  market  value  thereof,  for 
coin  or  Treasury  notes." 

<|3.  An  additional  section,  No.  5,  "that  duties 
on  imported  goods  and  proceeds  of  the  sale  of 
public  lands,"  etc.,  should  be  set  apart  to  pay 
coin  interest  on  the  debt  of  the  United  States; 
and  one  per  cent,  for  a  sinking  fund,  etc. 
t|On  the  18th  of  February,  1862,  Mr.  Stevens 
reported  the  bill,  as  amended  by  the  Senate, 
from  the  Committee  of  Ways  and  Means  to  the 
House,  and  said: 

CJ  "I  hope  the  Gentlemen  of  the  House  will  read 
the  amendments.  They  are  very  important, 
and,  in  my  judgment,  very  pernicious,  but  I  hope 
the  House  will  examine  them." 
CJ  On  Wednesday,  the  19th,  Mr.  Spaulding 
opened  the  debate.  I  quote  as  follows: 
CJ  "Mr.  Chairman,  I  desire  especially  to  oppose 
the  amendment  of  the  Senate  which  requires  the 
interest  on  bonds  and  notes  to  be  paid  in  coin 
semi-annually,  and  which  authorizes  the  Secre- 
tary of  the  Treasury  to  sell  six  per  cent  bonds  at 
the  market  prices  for  coin  to  pay  the  interest." 

"The  passage  of  the  measure,  The  Legal 
Tender  Bill,  in  this  House  was  hailed  with  satis- 
faction by  the  great  mass  of  the  people  all  over 
the  country.  It  received  the  hearty  endorsement 
of  such  bodies  as  the  Chambers  of  Commerce  of 
New  York,  Cincinnati,  St.  Louis,  Chicago,  Buf- 
falo, Milwaukee  and  other  places.  I  have  never 
known  any  measure  to  receive  a  more  hearty  ap- 
proval from  the  people." 


60         Anglo-American  Money  Lenders 

€J  "I  regret  to  say  that  some  of  the  amendments 
of  the  Senate  render  the  bill  incongruous,  and 
tend  to  defeat  its  great  object,  namely  to  prevent 
all  forcing  of  the  Government  to  sell  its  bonds  in 
the  market  to  the  highest  bidder  for  coin.  It 
might  be  very  pleasant  for  the  holders  of  the 
seven  and  three-tenths  Treasury  notes  and  six 
per  cent  bonds,  to  receive  their  interest  in  coin 
semi-annually,  but  very  disastrous  to  the  govern- 
ment to  be  compelled  to  sell  its  bonds,  at  ruinous 
rates  of  discount,  every  six  months  to  pay  them 
gold  and  silver,  while  it  would  pay  only  Treas- 
ury notes  to  the  soldier,  sailor  and  all  other  cred- 
itors of  the  Government. 

€J  "I  am  opposed  to  all  those  amendments  of  the 
Senate  which  discriminate  in  favor  of  the  hold- 
ers of  bonds  and  notes  by  compelling  the  Gov- 
ernment to  go  into  the  streets  every  six  months 
to  sell  bonds  at  the  'market  price',  to  purchase 
gold  and  silver  in  order  to  pay  the  interest  'in' 
coin'  to  the  capitalists  who  now  hold  United 
States  stocks  and  Treasury  notes  heretofore  is- 
sued, or  that  may  hold  bonds  and  notes  hereafter 
to  be  issued;  while  all  persons  in  the  United 
States  (including  the  Army  and  Navy  and  all 
who  supply  them  with  food  and  clothing)  are 
compelled  to  receive  non-legal  tender  Treasury 
'notes  in  payment  of  demands  due  them  from  the 
Government." 

CJP'Why  make  this  discrimination?  Who  asks 
to  have  one  class  of  creditors  placed  on  a  better 
footing  than  another  class?  Do  the  people  of 
New  England,  the  Middle  States,  or  the  people 
of  the  West  and  Northwest,  or  anywhere  else  in 
the  rural  districts,  ask  to  have  such  discrimina- 
tion made  in  their  favor?  Does  the  soldier,  the 


Prevent  American  Money-System        61 

farmer,  the  mechanic,  or  the  merchant  ask  to 
have  any  such  discrimination  made  in  his  favor? 
No,  sir;  no  such  unjust  preference  is  asked  for  by 
this  class  of  men.  They  ask  for  a  legal  tender 
note  bill  pure  and  simple.  They  ask  for  a  na- 
tional currency  which  shall  be  of  equal  value  in 
all  parts  of  the  country.  They  want  a  currency 
that  shall  pass  from  hand  to  hand  among  all  the 
people  in  every  State,  County,  City,  Town  and 
Village  in  the  United  States. 
CJ  "Who  then,  are  they  that  ask  to  have  a  prefer- 
ence given  to  them  over  other  creditors  of  the 
Government?  Sir,  it  is  a  very  respectable  class 
of  gentlemen,  but  a  class  of  men  who  are  very 
sharp  in  all  money  transactions.  They  are  not 
generally  among  the  producing  classes;  not 
among  those  who,  by  their  labor  and  skill,  make 
the  wealth  of  the  Country;  but  a  class  of  men 
that  have  accumulated  wealth,  men  who  are 
willing  to  lend  money  to  the  Government  if  you 
will  make  the  security  beyond  all  question,  give 
them  a  high  rate  of  interest,  and  make  it  payable 
in  coin.  Yes,  sir;  the  men  who  are  asking  these 
extravagant  terms,  who  want  to  be  preferred 
creditors,  are  perfectly  willing  to  lend  money  to 
the  Government  in  her  present  embarrassment, 
if  you  will  only  make  them  perfectly  secure,  give 
them  extra  interest,  and  put  your  bonds  on  the 
rnarket  at  the  'market  price'  to  purchase  gold 
and  silver  to  pay  them  interest  every  six  months. 
Yes,  sir;  entirely  willing  to  loan  money  on  these 
terms!  Safe,  no  hazard,  secure,  and  the  interest 
payable  'in  coin' !  Who  would  not  be  willing  to 
loan  money  on  such  terms?  Sir,  the  legal  tender 
Treasury  note  bill  was  intended  to  avoid  all  such 
financiering  and  protect  the  Government,  and 


62         Anglo-American  Money  Lenders 

people  who  pay  the  taxes,  from  all  such  hard  bar- 
gains. It  was  intended  as  a  shield  in  the  hands  of 
the  patriotic  people  of  the  Country  against  all 
forced  sales  of  bonds,  and  all  extravagant  rates 
of  interest." 

{J"The  very  discrimination  proposed  carries  on 
its  face  notice  to  everybody,  that  although  the 
notes  are  declared  to  be  'Lawful  money  and  a 
partial  legal  tender  in  payment  of  debts,'  yet 
there  is  something  of  higher  value,  that  must  be 
sought  after  at  a  sacrifice  to  the  Government  to 
pay  a  peculiar  class  of  creditors  to  whom  it  owes 
money,  a  kind  of  absurdity  and  self-stultification 
which  does  not  appear  well  on  the  face  of  the 
bill.  It  is  an  unjust  discrimination  which  does 
not  appear  well  now,  and  will  not  look  well  in 
history.  You  will,  if  the  Senate's  amendment  is 
adopted,  depreciate,  by  your  own  acts,  your  own 
bonds  and  notes,  and  effectually  destroy  the 
symmetry  and  harmonious  workings  of  the 
whole  plan." 

€JMr.  Stevens  closed  the  debate.  I  quote  from 
his  speech  as  follows: 

fj  "Mr.  Speaker,  I  have  a  very  few  words  to  say, 
I  approach  the  subject  with  more  depression  of 
spirits  than  I  ever  before  approached  any  ques- 
tion. No  personal  motive  or  feeling  influences 
me.  I  hope  not,  at  least.  I  have  a  melancholy 
foreboding  that  we  are  about  to  consummate  a 
cunningly  devised  scheme,  which  will  carry  great 
injury  and  great  loss  to  all  classes  of  the  people 
throughout  this  Union,  except  one.  With  my  col- 
league, I  believe  that  no  act  of  legislation  of  this 
Government  was  ever  hailed  with  as  much  de- 
light throughout  the  whole  length  and  breadth 
of  the  Union,  by  every  class  of  people,  without 


Prevent  American  Money-System        63 

any  exception,  as  the  Legal  Tender  Bill  we 
passed  and  sent  to  the  Senate.  Congratulations 
from  all  classes:  merchants,  traders,  manufac- 
turers, mechanics,  and  laborers  poured  in  upon 
us  from  all  quarters.  The  Board  of  Trade  from 
Boston,  New  York,  Philadelphia,  Cincinnati, 
Louisville,  St.  Louis,  Chicago  and  Milwaukee 
approved  its  provisions  and  urged  its  passage  as 
it  was. 

<JIt  is  true  there  was  a  doleful  sound  came  up 
from  the  caverns  of  bullion  brokers,  and  from 
the  saloons  of  the  associated  banks.  Their  cash- 
iers and  agents  were  soon  on  the  ground,  and 
persuaded  the  Senate,  with  but  little  delibera- 
tion, to  mangle  and  destroy  what  it  had  cost  the 
House  months  to  digest,  consider,  and  pass. 
They  fell  upon  the  bill  in  hot  haste,  and  so  dis- 
figured and  deformed  it,  that  its  very  father 
would  not  know  it.  Instead  of  being  a  benefi- 
cent and  invigorating  measure,  it  is  now  posi- 
tively mischievous.  It  has  all  the  bad  qualities 
which  its  enemies  charged  on  the  original  bill, 
and  none  of  its  benefits.  It  now  creates  money, 
and  by  its  very  terms  declares  it  a  depreciated 
currency.  It  makes  two  classes  of  money — one 
for  the  banks  and  brokers,  and  another  for  the 
people.  It  discriminates  between  the  rights  of 
different  classes  of  creditors,  allowing  the  rich 
capitalists  to  demand  gold,  and  compelling  the 
ordinary  lender  of  money  on  individual  security 
to  receive  notes  which  the  Government  had  pur- 
posely discredited." 

CJIn  a  speech  at  Philadelphia  January  1  5,  1  876, 
Judge  Kelly  says:  "I  remember  the  grand  'Old 
Commoner'  (Thaddeus  Stevens)  with  his  hat  in 
his  hand  and  his  cane  under  his  arm  when  he  re- 


64         Anglo-American  Money  Lenders 

turned  to  the  House  after  the  final  conference, 
and  shedding  bitter  tears  over  the  result.  *Yes', 
said  he,  'we  had  to  yield;  the  Senate  was  stub- 
born. We  did  not  yield  until  we  found  that  the 
country  must  be  lost  or  the  banks  be  gratified, 
and  we  have  sought  to  save  the  country  in  spite 
of  the  cupidity  of  its  wealthier  citizens." 

Full  Legal  Tender  Act  Defeated  and  Non-Legal 
Tender  "Greenbacks"  Authorized. 

€J  He  who  reads  the  history  of  the  fate  of  this  Bill 
to  create  a  full  legal  tender  dollar  and  the 
amendments  to  this  Bill,  that  substituted  the 
non-legal  tender  * 'Greenback"  for  the  full-legal- 
tender  dollar;  yet  characterizes  the  full-legal 
tender  money  herein  advocated,  as  a  revival  of 
the  "greenback  theory,"  or  as  a  "recrudescence 
of  greenbackism,"  is  either  a  fool  or  a  knave, 
CJThus  in  1  862  was  the  legal  tender  bill  defeated 
and  the  Government  prevented  from  exercising 
its  highest  act  of  sovereignty  to  create  money 
and  regulate  the  value  thereof — and  the  Inter- 
national bankers  and  money  lenders  prevented 
the  United  States  from  establishing  an  Ameri- 
can money  system  in  accord  with  its  constitution 
and  forced  upon  this  republic  the  British  money 
system,  banks  of  issue  and  specie  redemption. 
<f  It  should  be  borne  in  mind  at  this  date  that  the 
Rothschilds  and  their  correspondents  in  the 
United  States  had  cornered  all  the  gold  in  sight, 
leaving  in  the  currency  system  in  the  United 
States  only  $25,000,000,  of  gold,  most  of  which 
was  in  the  control  of  the  banking  interest.  They 
immediately  began  to  make  it  abnormally  valua- 
ble by  creating  extraordinary  demands  for  it, 


Prevent  American  Money-System        65 

consequently  they  used  every  effort  to  depreciate 
the  non-legal  tender  notes  of  the  Government 
and  bought  them  for  gold  which  they  controlled 
at  less  than  fifty  cents  on  the  dollar,  exchanging 
them  at  par  for  United  States  bonds  bearing  the 
highest  rate  of  interest. 

<JSecreary  of  the  Treasury  McCulloch,  in 
touch  with  the  foreign  bankers  and  their  repre- 
sentatives in  the  United  States,  in  his  first  annual 
report,  December  4th,  1865,  to  Congress,  made 
the  following  recommendations  which  were  em- 
bodied in  the  act  of  Congress  April  1  2th,  1  866, 
authorizing  the  Secretary  of  the  Treasury  to  sell 
5-20  bonds,  and  with  the  proceeds  to  retire  6  per 
cent  compound  interest,  notes  and  greenbacks, 
and  other  evidences  of  indebtedness  of  the  Gov- 
ernment. This  act  gave  Secretary  McCulloch 
unlimited  control  over  the  monetary  system  of 
the  United  States.  The  dealers  in  these  war 
debts  in  Europe  and  the  United  States  held  hun- 
dreds of  millions  of  these  securities  which  they 
had  bought  at  prices  ranging  from  35  cents  on 
the  dollar,  up.  While  these  securities  were  be- 
ing issued  during  the  war  the  money  power  de- 
preciated their  value,  in  order  that  they  might 
be  bought  in  at  the  lowest  possible  price.  With 
this  in  view  they  made  the  interest  on  bonds  and 
duties  on  imports  payable  in  gold  only,  to  dis- 
credit the  Government  currency.  In  order  to 
confuse  the  people  hopelessly  on  the  subject  of 
money  they  succeeded  in  having  the  Treasury 
Department  issue  fifteen  different  forms  of  its 
obligations.  Therefore,  it  was  impossible  for 
the  people  at  that  time  to  understand  all  these 
intermixed  and  various  forms  of  indebtedness 
and  currency.  Issuing  the  securities  of  the  Gov- 


66         Anglo-American  Money  Lenders 

ernment  in  these  peculiar  forms  gave  the  banks 
a  golden  opportunity  to  prey  upon  the  people. 

Move  of  the  Money  Power  to  Make  the  Princi- 
pal as  well  as  the  Interest  on  United  States 
Bonds  Payable  in  Gold. 

CJThe  money  power  having  possession  of  all  of 
the  outstanding  obligations  of  the  Government, 
immediately  began  to  use  their  unfailing  influ- 
ence upon  Congress  and  the  Treasury  to  increase 
their  value  by  making  them  payable  in  gold.  A 
living  historian  at  the  time  describes  it  as  fol- 
lows: 

€[["The  first  move  made  by  the  bullionists  and 
bondholders  was  to  educate  the  public  senti- 
ment, through  the  press,  in  regard  to  the  'sacred- 
ness  of  the  public  faith.'  The  leading  news- 
papers of  the  principal  cities  took  up  the  song, 
and  before  a  great  while  the  gentlemen  of  the 
country  press,  who  are  not  quick  to  learn  which 
way  the  wind  blows,  were  heard,  together  with 
the  demagogues  of  both  parties,  joining  in  the 
chorus." 

€J  "The  Hon.  Thaddeus  Stevens  expressly  asked 
the  Chairman  of  the  Ways  and  Means  Commit- 
tee and  was  plainly  answered  by  him,  that  only 
the  interest  was  payable  in  coin.  Mr.  Stevens 
then  continued,  'If  I  knew  that  any  party  in  this 
country  would  go  for  paying  in  coin  that  which 
is  payable  in  money,  thus  enhancing  it  one-half; 
if  I  knew  there  was  such  a  platform  and  such  de- 
termination on  the  part  of  any  party,  I  would 
vote  on  the  other  side.  I  would  vote  for  no  such 
swindle  upon  the  tax-payers  of  this  country;  I 
would  vote  for  no  such  speculation  in  favor  of 


Prevent  American  Money-System        67 

the  large  bondholders,  the  millionaires  who  took 
advantage  of  our  folly  in  granting  the  coin  pay- 
ments of  interest/ 

fj  Senator  Morton  declared  that  "we  should  do 
foul  injustice  to  the  Government  and  the  people 
of  the  United   States  after  having  sold  these 
bonds  on  an  average  for  not  more  than  sixty 
cents  on  the  dollar,  now  to  propose  to  make  a 
new  contract  for  the  benefit  of  the  bondholders." 
This  historian  goes  on  to  state  that  "The  presi- 
dential campaign  of  1  868  was  impending  and  it 
became  necessary  for  the  money  power  to  resort 
to  extraordinary  efforts  to  obtain  the  direction 
of  political  affairs.      The  Rothschilds  were  in 
possession  of  several  hundred  miilions  of  5-20 
bonds,  purchased  at  about  sixty  cents  on  the  dol- 
lar,  or  less,   and  were  particularly  interested. 
Their  agent,  August  Belmont,  who  had  secured 
the  position  of  Chairman  of  the  Democratic  Na- 
tional   Committee,    was    instructed    by    Baron 
James  Rothschild,  as  early  as  March  13,  1868, 
that  unless  the  Democratic  party  went  for  pay- 
ing the  5-20  bonds  in  gold,  it  must  be  defeated. 
Belmont  and  his  satellites  were  unable  to  control 
the  making  of  the  platform.    The  platform  read, 
"Resolved,  Third:  When  the  obligations  of  the 
Government  do  not  expressly  state  upon  their 
face,  or  the  law  under  which  they  were  issued 
does  not  provide,  that  they  shall  be  paid  in  coin, 
they  ought  in  right  to  be  paid  in  the  lawful 
money  of  the  United  States/         This  doomed 
the  party  to  defeat.  The  money  power  was  more 
successful  with  the  Republican  party  at  that  time 
and  through  their  aid  Grant  was  triumphantly 
elected  President. 


68         Anglo-American  Money  Lenders 


n  his  inaugural  address  he  alluded  to  "the 
sacredness  of  the  public  faith,"  and  "let  it  be 
understood  that  no  repudiator  of  one  farthing  of 
our  public  debt  will  be  trusted  in  place." 
tjln  due  time  such  a  bill  passed  Congress  and 
was  the  first  act  of  Congress  receiving  Grant's 
official  sanction. 

tJThis  Act  of  Congress  was  in  direct  violation 
of  the  contract  under  which  these  bonds  had 
been  issued,  and  it  could  have  been  repealed. 
Therefore,  the  Rothschilds  and  the  money 
power  lost  no  time  in  getting  the  Secretary  of 
the  Treasury  to  pay  off  these  bonds  in  gold  or 
its  equivalent. 

<}  An  able  financial  writer  familiar  with  this 
legislation  and  the  influences  controlling  the 
then  Secretary  of  the  Treasury,  discussed  it  as 
follows: 

C|  "This  signal  act  of  robbery,  for  it  is  only  one  of 
the  many  acts  of  robbery  which  have  been  per- 
petrated by  the  money  power  during  the  past 
few  years  under  the  guise  of  law,"  will  foot  up 
about  as  follows: 

Amount  of  5—20  6%  bonds.$500,000,000.00 

Interest  in  gold  at  6%  com- 
pounded semi-annually 
for  ten  years 403,096,132.71 


$903,096,132.71 
Cost  of  $500,000,000  bonds 
at,   say,   sixty  cents  on 
the  dollar 300,000,000.00 


Net  profit  in  ten  years  in 

gold $603,096,132.71 


Prevent  American  Money-System        69 

CJThe  next  move  of  the  money  power  was  to 
have  the  public  debt  refunded,  in  order  to  place 
its  payment  in  coin  beyond  all  question.  This 
was  done  by  the  Act  of  Congress,  July  1 4,  1  870. 
<J  It  is  clearly  shown  that  the  money  power  had 
complete  control  of  Congress  during  all  this  time 
and  put  laws  through  Congress  to  suit  them- 
selves, the  people  occupying  the  position  of  the 
forgotten  man.  Resumption,  1875,  of  Specie 
Payments.  At  which  time  Congress  was  a 
packed  Jury  in  the  Interest  of  the  Money  Power. 
€JIn  1875  they  put  into  operation  the  English 
scheme  of  robbing  the  people,  "specie  resump- 
tion," and  passed  a  law  decreeing  resumption  to 
take  place  January  1st,  1879. 
CJHon.  Moses  W.  Field,  of  Michigan,  a  member 
of  this,  the  43rd  Congress,  describes  its  make-up 
as  follows:  "Six  lumbermen,  thirteen  manufac- 
turers, seven  doctors,  fourteen  merchants,  thir- 
teen farmers,  three  millers,  one  land  surveyor, 
one  priest,  one  professor  of  latin,  one  doctor  of 
laws,  one  barber,  one  mechanic,  ninety-nine  law- 
yers, and  one  hundred  and  eighty-nine  bankers, 
which  included  stockholders  in  national  banks," 
a  clean  majority  of  them  being  bankers  or  inter- 
ested in  national  banks. 

fJThe  amount  of  paper  emissions  of  the  Gov- 
ernment, including  debts,  doing  the  work  of 
money  in  1865  and  1866  was  about  $1,800,- 
000,000.  The  condition  of  the  people  in  the 
United  States  at  this  time  is  described  as  fol- 
lows: 

C|In  1865-66,  after  the  termination  of  the  war, 
industry,  by  reason  of  the  abundance  of  money 
in  circulation,  was  rife  throughout  the  country, 
and  production  went  on  as  it  had  never  done  be- 


70      Destruction   and   Desolation    Caused 

fore.  The  Secretary  of  the  Treasury,  McCulloch, 
himself  has  since  admitted  the  people  were  in- 
dividually out  of  debt." 

CJ  Under  such  conditions,  what  reason  or  justifi- 
cation could  there  be  found  for  the  resumption 
of  specie  payments,  for  the  purpose  of  contract- 
ing the  circulating  medium  of  the  country.  It 
was  plainly  brought  about  by  the  International 
bankers,  or  money  power,  as  their  next  move  to 
permanently  establish  the  gold  basis  and  banks 
of  issue  money  system,  in  order  to  exploit  the 
people  of  the  United  States. 

Destruction  and  Desolation  Caused  by  the  Re- 
sumption of  Specie  Payments. 

€|In  the  Congressional  Report  of  1876,  page 
2939,  the  Hon.  Mr.  Rea  said,  speaking  to  the 
same  question: 

€J  "I  feel  it  to  be  my  duty  to  say  something  in  my 
feeble  way  in  behalf  of  the  thousands  of  men 
and  women  in  the  United  States  who  are  out  of 
employment  and  begging  for  bread — seeking 
remunerative  employment,  but  can  find  none. 
These  are  perilous  times.  Thousands  of  good 
business  men  have  become  bankrupt,  and  thou- 
sands more  must  soon  follow. 
€f  "The  policy  of  the  contraction  of  the  currency 
and  the  increasing  of  the  gold  interest-bearing 
debt  of  the  nation  have  resulted  in  great  disaster 
to  the  business  of  the  country.  The  people,  I 
believe,  are  opposed  to  the  policy — they  are  de- 
manding the  repeal  of  the  specie  resumption  act 
by  which  it  is  proposed  to  resume  specie  pay- 
ment in  1879.  Congress  should  at  once  repeal 


To  Establish  So-called  Gold  Standard      7 1 

the  resumption  act.  The  people  demand  it.  It 
is  a  fraud  and  a  cheat.  The  people  of  this  coun- 
try do  not  favor  the  conversion  of  our  legal 
tender  currency  into  an  interest-bearing  debt. 
The  contraction  of  the  currency  should  at  once 
be  stopped." 

<JThe  conspirators  in  the  scheme  of  contraction 
were  not  ignorant  of  the  devastation  which  fol- 
lowed their  cruel  work.  There  were  men  in 
Congress  who  warned  and  entreated  them. 
CJIn  December,  1866,  we  had  $1,906,687,770 
in  circulation.  Col.  B.  S.  Heath,  author  of 
Finance  Revolution,  says: 

<|  "During  this  year,  there  were  but  520  business 
failures  in  the  while  country,  involving  a  loss  of 
but  $  1  7,625,000.  Labor  was  well  paid  and  fully 
employed. 

<J*'1867.  This  year  of  contraction  was  vigor- 
ously pushed,  and  there  were  2,386  failures, 
with  a  total  loss  of  $86,218,000. 
«J"1868.  During  this  year,  $473,000,000  of 
money  was  destroyed,  and  failures  increased  to 
2,608,  with  a  loss  to  creditors  of  $63,774,000. 
Money  began  to  be  tight,  and  financial  'spasms' 
were  frequent. 

If"!  869.  During  this  year  over  $500,000,000 
of  money  passed  into  the  cremation  furnace,  pro- 
ducing 2,790  business  failures,  and  a  loss  of 
$75,054,900.  Money  growing  tighter  and 
wages  lower. 

€J  "  1  870.  This  year  $67,000,000  of  money  was 
destroyed,  and  3,551  failures  took  place,  in- 
volving a  loss  of  $88,242,000.  Money  was 
scarce  and  wages  of  labor  were  reduced  all  over 
the  country. 


72      Destruction   and   Desolation   Caused 

<J**1871.  Thirty-five  millions  of  money  this 
year  is  retired,  with  2,91  5  failures  and  a  loss  of 
$85,250,000.  More  men  out  of  work  and 
wages  cut  down. 

C]["1872.  Only  about  $12,000,000  was  de- 
stroyed this  year,  but  such  has  been  the  strain 
upon  the  business  of  the  country  for  the  past  five 
years  that  this  proved  the  last  straw  to  4,069 
business  firms,  involving  a  loss  of  $  1  2 1 ,058,000. 
More  cutting  of  wages  and  strikes  talked  of. 
<J"1873.  This  year  the  storm  reached  its 
climax.  Business  had  hoped  that,  with  every 
returning  season,  prospects  would  brighten  and 
money  would  become  plenty.  Instead  of  this, 
however,  notwithstanding  but  $1 ,609,000  were 
destroyed,  the  people  became  panic-stricken, 
and  5, 1 83  business  firms  were  precipitated,  with 
a  loss  of  $228,499,000.  Five  hundred  thousand 
men  are  thrown  out  of  employment;  wages  cut 
down  all  over  the  country,  and  strikes  are  of  fre- 
quent occurrence. 

<J"1874.  Notwithstanding  the  terrible  results 
of  the  last  year,  the  wine  press  of  contraction 
still  creaks  on  its  hinges  of  death,  as  round  and 
round  it  sweeps  out  of  circulation  $75,484,000 
certificates  of  indebtedness,  which  had  been 
made  legal  tender  money,  $85,760,000  Treas- 
ury notes,  $6,335,045  legal  tenders,  $3,000,000 
fractional  currency,  and  $  1 ,000,000  bank  notes, 
producing  5,835  failures,  and  a  loss  of  $155,- 
239,000  to  creditors.  A  million  idle  men  began 
to  tramp  in  search  of  work.  Wages  still  decline, 
and  strikes  more  numerous. 
€f*'1875.  The  volume  of  currency,  this  year 
was  contracted  $40,817,418,  and  the  failures 
reached  7,740,  with  loss  to  creditors  of  $201,- 


To  Establish  So-called  Gold  Standard      73 

060,000.  Two  millions  of  laborers  out  of  work. 
Famine  and  hunger  begin  to  stare  them  in  the 
face,  and  *  tramping'  becomes  a  profession. 
'IJ"1876.  According  to  the  most  reliable  esti- 
mates, the  contraction  of  the  currency  this  year, 
in  the  destruction  of  greenbacks  and  the  with- 
drawal of  bank  currency  amounted  to  about 
$85,000,000,  with  9,062  failures,  and  $191,- 
000,000  loss,  during  the  first  quarter  of  the  year. 
The  aggregate  failures  for  the  year  reached  over 
10,000,  with  losses  not  less  than  $300,000,000. 
This  does  not  include  losses  to  stockholders,  by 
foreclosure  and  sale  of  railroads. 
tj  "What  a  record  for  ten  years.  Who  wonders 
times  were  hard,  and  men  idle?  Still,  with  all 
this  array  of  wreck  and  ruin,  with  the  finger- 
board of  contraction,  at  the  close  of  each  year, 
pointing  to  the  cause,  the  people  were  asleep,  or 
on  their  knees  praying  for  some  interposition  of 
Providence  in  their  behalf,  while  John  Sherman 
went  marching  on  with  the  torch  of  death,  to 
burn  the  remaining  $300,000,000  of  the  people's 
money. 

If' 'Three  million  men  are  out  of  employment. 
^"Bankruptcies  multiplying  with  great  ra- 
pidity. 

CJ  "The  tramp  nuisance  culminates. 
CJ  "Wages  are  cut  down  to  starvation  prices. 
CJ  "Strikes,  riots  and  general  consternation  seize 
the  people,  and  the  circulation  is  cut  down  to 
$600,000,000. 

CJ  "In  1 873  came  the  crash,  and  all  the  languages 
of  the  world  cannot  describe  the  agonies  suffered 
by  the  American  people  from  1873  to  1879. 
Thousands  and  thousands  supposed  they  had 
enough;  enough  for  their  declining  years, 


74      Destruction   and   Desolation   Caused 

enough  for  wife  and  children,  and  suddenly 
found  themselves  paupers  and  vagrants.  Busi- 
ness stood  still.  The  men  stopped  digging  ore; 
they  stopped  felling  the  forest.  The  fires  died 
out  in  the  furnaces.  The  men  who  had  stood 
in  the  glare  of  the  forge  were  in  the  gloom  of 
despondency.  There  was  no  employment  for 
them.  The  employer  could  not  sell  his  product. 
The  great  factories  were  closed,  the  workmen 
were  demoralized,  and  the  roads  of  the  United 
States  were  filled  with  tramps." 
CJ  Abraham  Lincoln  said: 

if  "If  a  government  contracted  a  debt  with  a  cer- 
tain amount  of  money  in  circulation  and  then 
contracted  the  money  volume  before  the  debt 
was  paid,  it  is  the  most  heinous  crime  a  govern- 
ment could  commit  against  the  people." 


GOVERNMENT  FORESTALLED  IN  EXER- 
CISING ITS  HIGHEST  ACT  OF  SOVER- 
EIGNTY BY  BANKS  BEING  GIVEN  THE 
POWER  TO  ISSUE  A  SUBSTITUTE  FOR 
MONEY. 


N  the  autumn  of  1  862  a  "Confiden- 
tial circular"  was  issued  by  an 
agent  of  European  Capitalists  to 
American  Bankers,  known  as  "The 
Hazard  Circular."  It  reads  as  fol- 
lows: 

CJ  "Slavery  is  likely  to  be  abolished  by  the  war 
power,  and  chattel  slavery  destroyed.  This,  I 
and  my  European  friends  are  in  favor  of,  for 
slavery  is  but  the  owning  of  labor,  and  carries 
with  it  the  care  of  the  laborer;  while  the  Euro- 
pean plan,  led  on  by  England,  IS  CAPITAL'S 
CONTROL  OF  LABOR,  BY  CONTROLLING 
WAGES.  THIS  CAN  BE  DONE  BY  CON- 
TROLLING THE  MONEY;  The  great  debt 
that  capitalists  will  see  to  it  is  made  out  of  the 
war,  must  be  used  as  a  measure  to  control  the 
volume  of  money.  To  accomplish  this  the  bonds 
must  be  used  as  a  banking  basis.  We  are  now 
waiting  to  get  the  Secretary  of  the  Treasury  to 
make  this  recommendation  to  Congress." 

National  Bankers'  Circular. 

<jf"Dear  Sir: — It  is  advisable  to  do  all  in  your 
power  to  sustain  such  daily  and  weekly  news- 


76     Highest  Act  of  Sovereignty  Transferred 

papers,  especially  the  agricultural  and  religious 
press,  as  will  oppose  the  issuing  of  greenback 
paper  money,  and  that  you  also  withhold  patron- 
age or  favors  from  all  who  will  not  oppose  the 
Government-issue  of  money.  Let  the  Govern- 
ment issue  the  coin,  and  the  banks  issue  the 
paper  money  of  the  country;  for  then  we  can 
better  protect  each  other.  To  repeal  the  law 
creating  National  Banks,  or  to  restore  to  circula- 
tion the  Government-issue  of  money,  will  be  to 
provide  the  people  with  money,  and  will,  there- 
fore, seriously  affect  your  individual  profit  as 
bankers  and  lenders.  See  your  member  of  Con- 
gress at  once,  and  engage  him  to  support  our  in- 
terest that  we  may  control  legislation." 
IJThis  circular  was  signed  by  the  official  repre- 
sentative of  the  National  Bankers'  Association, 
James  Buell. 

CJThe  original  copy  of  the  Circular  was  obtained 
personally  by  the  Hon.  Isaac  Sharp,  Acting  Gov- 
ernor of  Kansas  (who  had  been,  when  very 
young,  a  favorite  law  student  of  Thaddeus 
Stevens,  hence  his  interest  in  the  question) ,  from 
Mr.  J.  W.  Simcock,  the  cashier  of  the  First  Na- 
tional Bank  of  Council  Grove,  Kansas.  Mr. 
Sharp  at  the  time  was  attorney  for  that  bank — 
Mr.  Simcock  at  the  same  time  gave  him  the  Cir- 
cular of  the  American  Bankers'  Association 
signed  by  Buell.  Mr.  Sharp  states  that  when  in 
London  he  traced  up  Mr.  Hazard  and  found  him 
to  be  the  Solicitor  of  an  English  Bankers'  Asso- 
ciation in  touch  with  bankers  throughout  Eu- 
rope and  was  financially  connected  with  the 
Rothschilds. 


Tp  Money-Lending  Corporations         77 

State  of  Colorado,        1 
County  of  Arapahoe,  J  s 

Frederick  A.  Luckenbach,  being  first  duly 
sworn  on  oath,  deposes  and  says:  I  am  62 
years  of  age.  I  was  born  in  Bucks  County, 
Pennsylvania.  I  removed  to  the  City  of  Phila- 
delphia in  the  year  1  846,  and  continued  to  re- 
side there  until  1  866,  when  I  removed  to  the 
City  of  New  York.  In  Philadelphia  I  was  in 
the  furniture  business;  in  New  York  I 
branched  into  machinery  and  inventions  and 
am  the  patentee  of  Luckenbach's  Pneumatic 
Pulverizer,  which  machines  are  now  in  use 
generally  in  the  eastern  part  of  the  United 
States  and  in  Europe.  I  now  reside  in  Denver, 
having  removed  there  from  New  York  two 
years  ago.  I  am  well  known  in  New  York.  I 
have  been  a  member  of  the  Produce  Exchange 
and  am  well  acquainted  with  many  members 
of  that  body.  I  am  well  known  by  Erastus 
Wyman. 

In  the  year  1 865  I  visited  London,  England, 
for  the  purpose  of  placing  there  Pennsylvania 
Oil  properties  in  which  I  was  interested.  I 
took  with  me  letters  of  introduction  to  many 
gentlemen  in  London — among  them,  one  to 
Mr.  Ernest  Seyd  from  Robert  M.  Foust,  ex- 
Treasurer  of  Philadelphia.  I  became  well  ac- 
quainted with  Mr.  Seyd  and,  with  his  brother, 
Richard  Seyd,  who  I  understand  is  yet  living, 
I  visited  London  thereafter  every  year  and  at 
each  visit  renewed  my  acquaintance  with  Mr. 
Seyd,  and  upon  each  occasion  became  his 
guest  one  or  more  times — joining  his  family  at 
dinner  or  other  meals. 


78     Highest  Act  of  Sovereignty  Transferred 

In  February,  1874,  while  on  one  of  these 
visits  and  while  his  guest  for  dinner,  I,  among 
other  things,  alluded  to  rumors  afloat  of  Par- 
liamentary Corruption  and  expressed  aston- 
ishment that  such  corruption  should  exist.  In 
reply  to  this,  he  told  me  he  could  relate  facts 
about  the  corruption  of  the  American  Con- 
gress that  would  place  it  far  ahead  of  the  Eng- 
lish Parliament  in  that  line,  so  far  the  conver- 
sation was  at  the  dinner  table  between  us.  His 
brother  Richard  and  others  were  there  also, 
but  this  was  table-talk  between  Mr.  Ernest 
Seyd  and  myself.  After  the  dinner  ended,  he 
invited  me  to  another  room  where  he  resumed 
the  conversation  about  legislative  corruption. 
He  said:  "If  you  will  pledge  me  your  honor 
as  a  gentleman  not  to  divulge  what  I  am  about 
to  tell  while  I  live,  I  will  convince  you,  that 
what  I  said  about  the  corruption  of  the  Ameri- 
can Congress  is  true."  I  gave  him  the  prom- 
ise and  he  then  continued,  "I  went  to  America 
in  the  winter  of  1 872-73  authorized  to  secure, 
if  I  could,  the  passage  of  a  bill  demonetizing 
silver  as  it  was  to  the  interest  of  those  I  repre- 
sented— the  Governors  of  the  Bank  of  Eng- 
land— to  have  it  done.  I  took  with  me  £  1 00,- 
000  Sterling,  with  instructions  that  if  that  was 
not  sufficient  to  accomplish  the  object,  to 
draw  for  another  £100,000  or  as  much  more 
as  was  necessary."  He  told  me  German 
Bankers  were  also  interested  in  having  it  ac- 
complished. He  said  he  was  the  financial  ad- 
visor of  the  Bank.  He  said,  "I  saw  the  Com- 
mittees of  the  House  and  Senate  and  paid 
the  money  and  stayed  in  America  until  I  knew 
the  measure  was  safe."  I  asked  him  if  he 


To  Money-Lending  Corporations         79 

would  give  me  the  names  of  the  Members  to 
whom  he  paid  the  money — but  this  he  de- 
clined to  do.  He  said  "Your  people  will  not 
now  comprehend  the  far-reaching  extent  of 
that  Measure — but  they  will  in  after  years. 
Whatever  you  may  think  of  corruption  in  the 
English  Parliament,  I  assure  you  I  would  not 
have  dared  to  make  such  an  attempt  here  as 
I  did  in  your  Country."  1  expressed  my 
shame  to  him  for  my  Countrymen  in  our  Leg- 
islative Bodies.  The  conversation  drifted  into 
other  subjects,  and  after  that — though  I  met 
him  many  times — the  matter  was  never  re- 
ferred to  again. 

(Signed)     Frederick  A.  Luckenbach. 

Subscribed  and  sworn  to  before  me  at  Den- 
ver, this  9th  day  of  May,  1  892. 

(Signed)     James  A.  Miller, 

Clerk,  Supreme  Court, 
State  of  Colorado. 
(Seal) 

fJThe  Bankers'  Magazine,  August,  1873,  says: 

In  1872,  silver  being  demonetized  in 
France,  England  and  Holland,  a  Capital  of 
$500,000  was  raised  and  Ernest  Seyd,  of  Lon- 
don, was  sent  to  this  Country  with  this  fund, 
as  the  agent  of  foreign  bondholders  and  capi- 
talists, to  effect  the  same  object  here,  which 
was  accomplished. 

<JThe   Congressional   Record   of  April,    1872, 
page  2032,  says: 

Ernest  Seyd,  of  London,  a  distinguished 
writer  and  bullionist,  who  is  now  here,  has 


80     Highest  Act  of  Sovereignty  Transferred 

given  great  attention  to  the  subject  of  mint 
and  coinage.  After  having  examined  the  first 
draft  of  the  bill,  he  made  sensible  suggestions 
which  the  Committee  adopted  and  embodied 
in  the  bill. 

It  should  be  borne  in  mind  that  in  1  866-67  the 
people  of  the  United  States  were  generally  occu- 
pied in  the  great  losses  and  demoralization  as 
the  result  of  the  Civil  War.  Few  people,  at 
this  time,  knew  anything  about  money  apart 
from  trying  to  get  hold  of  dollars  to  meet  their 
daily  needs.  There  was  one  man  in  the  United 
States  who  was  then  making  a  study  of  it  as  a 
means  of  amassing  a  private  fortune  and  was  co- 
operating with  the  leading  foreign  money-lend- 
ers and  bullionists.  John  Sherman  in  1  868  was 
chairman  of  the  Finance  Committee  of  the 
United  States  Senate.  At  this  time,  when  hun- 
dreds of  millions  of  United  States  bonds  were 
'held  in  Europe,  and  when  speculation  in  the 
debts  growing  out  of  our  Civil  War  concentrated 
in  London,  Senator  John  Sherman,  fortified 
with  the  great  prestige  of  Chairman  of  the  Fi- 
nance Committee  of  the  United  States  Senate, 
visited  London  in  1  867  in  his  own  interest.  At 
this  time  no  one  in  the  United  States  was  asking 
or  advocating  any  movement  that  would  affect 
the  use  of  silver  as  money.  After  conferring 
with  these  dealers  in  bonds,  in  London,  Sher- 
man went  over  to  Paris  to  attend  the  Interna- 
tional Conference  of  1  867.  Mr.  Samuel  B.  Rug- 
gles,  a  member  of  the  New  York  Chamber  of 
Commerce,  in  contact  with  the  banking  interest 
of  New  York,  secured  the  appointment  as  dele- 
gate from  the  United  States  to  that  Conference. 


To  Money-Lending  Corporations         81 

Mr.  Sherman  at  once  got  in  contact  with  Mr. 
Ruggles  in  Paris  and  both  of  them  became 
strong  advocates  of  the  so-called  Gold  Standard. 
On  the  1  7th  day  of  May,  1  867,  Mr.  Ruggles  ad- 
dressed a  letter  to  Mr.  Sherman  in  which  he 
stated  that  the  International  Conference  was 
thn  in  session  "to  agree,  if  possible,  on  a  com- 
mon unit  of  money."  The  next  day,  May  1  8th, 
Mr.  Sherman  answered  Mr.  Ruggles.  In  this  let- 
ter he  stated  that  he  favored  the  proposition, 
saying:  "If  this  is  done,  France  will  surely  aban- 
don the  impossible  effort  of  making  two  stand- 
ards of  value.  Gold  coins  will  answer  all  the 
purposes  of  Europe."  This  letter  was  read  in 
full  to  the  Conference  as  the  views  and  opinions 
of  the  Chairman  of  the  Finance  Committee  of 
the  United  States  Senate.  Any  one  reading  this 
letter  in  full  will  see  that  it  was  a  carefully  pre- 
pared product  resulting  from  the  conference 
held  in  London  by  John  Sherman  and  those  rep- 
resenting the  European  money  power,  with 
whom  he  had  made  his  business  connections  on  a 
gold  basis.  On  the  6th  of  January,  1  868,  John 
Sherman  introduced  in  the  Senate — "A  Bill  in 
Relation  to  the  Coinage  of  Gold  and  Silver," 
which  was  referred  to  his  Committee  on  Finance, 
he  called  this  bill  up  in  the  Senate  on  the  9th  of 
June,  1  868,  and  strongly  urged  its  passage  using, 
as  his  main  argument,  the  reports  of  Samuel 
Ruggles  of  the  proceedings  of  the  Paris  Confer- 
ence. Fortunately,  there  was  on  the  Senate  Fi- 
nance Committee  an  honest  man  of  ability  who 
knew  something  about  the  money  question  and 
exposed  the  scheme.  Senator  E.  D.  Morgan,  of 
New  York,  submitted  a  minority  report  in  which 
he  opposed  any  international  regulation  of 


82      Highest  Act  of  Sovereignty  Transferred 

money,  as  something  that  would  fetter  the 
United  States  and  said,  "that  it  would  be  well 
for  the  government  to  increase,  rather  than  dis- 
continue, the  coinage  of  silver  and  that  it  should 
be  poured  in  the  current  of  commerce  in  full  vol- 
ume '  Mr.  Morgan  then  said:  "The  war  gave  us 
self-assertion  of  character  and  removed  many 
impediments  to  progress.  Its  expensive  lesson 
will  be  measurably  lost  if  it  fails  to  impress  upon 
us  the  fact  that  we  have  a  distinctive  American 
policy  to  work  out — one  sufficiently  free  from 
the  traditions  of  Europe  to  be  suited  to  our  pecu- 
liar situation  and  the  genius  of  our  enterprising 
countrymen."  Senator  Morgan's  opposition 
killed  this  bill  to  demonetize  silver.  The  reading 
of  Mr.  Morgan's  report  settled  its  fate  and  it 
would  not  have  received  a  single  vote  in  the  Sen- 
ate. Senator  Morgan  put  such  a  prompt  quietus 
on  this  bill  that  its  villainous  motive  was  not  dis- 
covered by  the  leading  men  in  Congress.  Those 
back  of  it  realized  at  once  that  they  could  not  af- 
ford to  have  it  discussed  in  the  open — John  Sher- 
man used  that  stealth  and  diplomacy  which  char- 
acterized his  whole  life  in  the  United  States  Sen- 
ate, and  succeeded  in  doing  that,  by  stealth  and 
chicanery  which  he  and  his  backers  knew  was 
impossible  of  accomplishment  by  fair  and  honest 
methods.  They  knew  it  was  a  matter  of  the  first 
importance  that  their  personality  and  interest  in 
he  bill  should  be  concealed  from  the  public.  In 
order  to  do  this  they  had  a  long  and  technical 
bill  framed  by  Boutwell  through  John  Jay  Knox 
in  1 870  at  a  time  when  the  subject  was  not  be- 
fore the  people  and  little  or  no  interest  was  taken 
in  it  as  it  was  thought  to  be  a  scientific  Mint  bill 


To  Money-Lending  Corporations         83 

drawn  up  by  specialists  in  the  U.  S.  Mint  and 
Treasury. 

IJThis  bill  was  entitled  "An  act  revising  and 
amending  the  laws  relative  to  the  Mints,  assay 
offices  and  coinage  of  the  United  States,"  and 
was  always  represented  to  Congress  as  a  meas- 
ure for  the  sole  convenience  of  the  specialists  in 
the  Mint  and  Treasury.  It  should  be  borne  in 
mind  that  at  this  time  the  United  States  needed 
all  the  money  that  it  could  posibly  get  through 
the  operations  of  the  Mint  to  carry  on  the  tre- 
mendous task  of  developing  the  resources  of  the 
country  and  paying  off  its  bonded  indebtedness 
that  had  been  forced  upon  the  people  by  the 
money  power  back  of  this  bill.  Yet  the  above 
methods  were  resorted  to  by  the  money  powers 
to  prevent  the  United  States  from  adding  to  the 
money  supply,  their  object  being  to  convert  sil- 
ver money  into  debts,  thereby  contracting  the 
currency  and  at  the  same  time  making  the  hun- 
dreds of  millions  of  United  States  bonds  that 
they  held,  payable  in  gold.  This  was  done  with- 
out the  knowledge  of  the  voters  or  taxpayers  of 
the  country,  who  had  to  meet  these  obligations, 
and  suffer  the  loss  and  fearful  consequences  of 
this  treasonable  act.  The  record  will  show  that 
the  leading  men  in  the  Congress  of  the  United 
States  were  absolutely  ignorant  of  this  infamous 
conspiracy.  I  give  the  testimony  of  the  repre- 
sentatives of  the  people  in  Congress,  including 
the  President  of  the  United  States  at  that  time 
as  to  the  passage  of  this  bill. 

IJU.  S.  Grant  stated:  "I  did  not  know  that  the 
act  of  1  873  demonetized  silver.     I  was  deceived 
in  the  matter." 
t| Senator  Morgan,  December  12th,  1877: 


84      Highest  Act  of  Sovereignty  Transferred 

<jf"Did  the  people  demonetize  silver?  Never! 
It  cannot  even  be  fairly  said  that  Congress  did  it. 
It  was  done  in  a  corner  darkly.  It  was  done  at 
the  instigation  of  the  bondholders  and  other 
money  kings,  who  now,  with  upturned  eyes,  de- 
plore the  wickedness  we  exhibit  in  asking  the 
question,  even,  who  did  this  great  wrong  against 
the  toiling  millions  of  our  people?" 
§  Judge  Kelly,  in  the  House,  May  1 0th,  1 879: 
CJ  "Never  having  heard  until  a  long  time  after  its 
enactment  into  law  of  the  substitution  in  the 
Senate  of  the  section  which  dropped  the  Stand- 
ard dollar,  I  profess  to  know  nothing  of  its  his- 
tory; but  I  am  prepared  to  say  that  in  all  the  leg- 
islation of  this  country  there  is  no  mystery  like 
the  demonetization  of  the  standard  silver  dollar 
of  the  United  States." 

CJ  Senator  Voorhees,  January  1  5th,  1  878: 
<J"No  man  has  ever  dared  to  whisper  of  a  con- 
templated assault  upon  it  (the  Standard  silver 
dollar)  and  when  the  twelfth  day  of  February, 
1873,  approached,  the  day  of  doom  to  this 
American  dollar,  the  dollar  of  our  fathers,  how 
silent  was  the  work  of  the  enemy!  Not  a  sound, 
hot  a  word,  no  note  of  warning  to  the  American 
people  that  their  favorite  coin  was  about  to  be 
destroyed;  that  the  greatest  financial  revolution 
of  modern  times  was  in  contemplation  and  about 
to  be  accomplished  against  their  dearest  rights! 
Never  since  the  foundation  of  the  government 
has  a  law  of  such  vital  and  tremendous  import, 
or  indeed  of  any  importance  at  all,  crawled  into 
our  statute  books  so  furtively  or  noiselessly  as 
this.  Its  enactment  there  was  so  completely  un- 
known to  the  people,  and  indeed  to  four-fifths 
of  Congress  itself,  as  the  presence  of  a  burglar  in 


To  Money-Lending  Corporations         85 

a  house  at  midnight  to  its  sleeping  inmates.  This 
was  rendered  possible  partly  because  the  clan- 
destine movement  was  so  utterly  unexpected 
and  partly  from  the  nature  of  the  bill  in  which  it 
occurred.  The  silver  dollar  of  American  history 
was  demonetized  in  an  act  entitled  "An  act  re- 
vising and  amending  the  laws  relative  to  the 
mints,  assay  offices  and  coinage  of  the  United 
States." 

CJ Senator  Howe  February  5th,  1 878: 
C][*'The  act  of  1  873,  I  charge  it  with  guilt  com- 
pared with  which  the  robbery  of  $200,000,000 
is  venial." 

§  Senator  Beck,  January  1  Oth,  1  878: 
€J"It  (the  bill  demonetizing  silver)  never  was 
understood  by  either  House  of  Congress.  I  say 
that  with  full  knowledge  of  the  facts — No  news- 
paper reporter — and  they  are  the  most  vigilant 
men  I  ever  saw  in  obtaining  information — dis- 
covered that  it  had  been  done." 
<J  Senator  Beck,  "I  know  that  the  bondholders 
and  the  monopolists  of  this  country  are  seeking 
to  destroy  all  the  industries  of  this  people,  in 
their  greed  to  enhance  the  value  of  their  gold.  I 
know  that  the  act  of  1873  did  more  than  all  else 
to  accomplish  that  result,  and  the  demonetiza- 
tion act  of  the  Revised  Statutes  was  an  illegal 
and  unconstitutional  consummation  of  the 
fraud." 

<JThis  law  struck  down  the  silver  money  of 
the  government  in  1873  which,  by  construc- 
tion, became  debts  payable  in  gold.  It  should 
be  remembered  at  this  time  that  the  money 
power  back  of  the  demonetization  of  silver  had 
previously  succeeded  in  stopping  the  govern- 


86      Highest  Act  of  Sovereignty  Transferred 

ment  from  issuing  its  full  legal  tender  money 
and  had  established  National  Banks  of  Issue  in 
the  United. States — therefore  the  destruction  of 
the  legal  tender  silver  money  of  the  government 
left  the  National  Banks  completely  in  control  of 
the  currency  based  upon  the  fraudulent  founda- 
tion of  gold  which  these  International  bankers 
could  manipulate  and  control. 


NATIONAL  BANKS. 


ALMON  P.  CHASE  became  Secre- 
tary of  the  United  States  Treasury. 
He  had  had  no  previous  experience 
to  qualify  him  for  the  position  and 
was  in  f  reindly  relations  with  lead- 
ing bankers  in  New  York.  He  was 
a  man  of  good  standing  in  the  legal  profession. 
Under  the  influence  of  the  banking  interest,  as 
soon  as  he  became  Secretary  of  the  Treasury,  he 
was  enlisted  in  a  scheme  to  destroy  the  Old  State 
Banks  and  to  establish  so-called  National  Banks 
of  Issue,  those  back  of  him  having  determined 
that  the  Government  should  be  prevented  from 
issuing  its  own  legal  tender  money,  thus  estab- 
lishing an  American  Money  System  in  the  inter- 
est of  the  people. 

<J  I  would  call  especial  attention  to  the  fact  that 
John  Sherman  was  in  charge  of  the  bill  and  made 
a  favorable  report  upon  same  from  the  Finance 
Committee  of  the  Senate  on  February  2,  1  863. 
It  was  taken  up  in  the  Senate  on  February  the 
ninth  and  passed  on  February  twelfth  by  a  vote 
of  22  to  2 1 .  It  was  then  sent  to  the  House  on  the 
thirteenth  of  February  and  never  referred  to  the 
Committee  on  Ways  and  Means,  which  should 
have  been  its  regular  order;  was  taken  up  on  the 
nineteenth  and  passed  the  House  on  the  twen- 
tieth of  this  same  month  by  a  vote  of  78  to  64.  It 
was  approved  by  the  President  and  became  a 
law  February  25th,  1863. 


Called  National  Banks 

CjfThus  this  bill  changed  the  whole  currency 
system  of  this  country  and  transferred  the 
sovereign  right  of  the  Government  "to  issue 
money"  to  Banking  Corporations  organized  for 
private  gain.  Thus  we  see  the  vicious  principles 
of  the  two  so-called  United  States  Banks  perpet- 
uated in  the  hydra-headed  so-called  National 
Banks  of  the  United  States. 

€J  At  this  time,  when  the  attention  of  the  people 
was  entirely  diverted  from  this  subject,  and  ob- 
livious of  the  real  nature  and  character  of  the 
bill,  being  absorbed  in  all  the  excitement  and 
exigencies  of  a  civil  war,  John  Sherman,  as  the 
agent  and  attorney  of  the  money  power,  takes 
advantage  of  this  opportunity  to  inflict  upon  the 
United  States  the  pernicious  English  System  of 
banks  of  issue  and  passed  this  bill  through  both 
Houses  of  Congress  in  the  short  space  of  ten 
days. 

IfThe  fifth  section  of  the  act  incorporating  Na- 
tional Banks  provides  as  follows:  "No  Associa- 
tion is  authorized  to  commence  business  until  it 
shall  have  deposited  United  States  Bonds  to  the 
amount  of  $30,000  with  the  Treasurer  of  the 
United  States.  Sixth:  Every  such  association  is 
entitled  to  receive  from  the  Comptroller  of  the 
Currency  circulating  notes  to  the  amount  of 
ninety  per  cent  of  the  Capital  Stock,  if  it  does 
not  exceed  $500,000;  eighty  per  cent,  if  it  ex- 
ceeds $500,000  and  does  not  exceed  $1,000,- 
000;  seventy-five  per  cent  if  it  exceeds  $1 ,000,- 
000  but  does  not  exceed  $3,000,000,  and  sixty 
per  cent  if  it  exceeds  $3,000,000.  It  should  be 
borne  in  mind  that  no  national  bank  notes  were 
issued  until  1864  and  that  the  $500,000,000— 
of  5 — 20  bonds  were  not  sold  until  the  latter  part 


Money-Lending  Corporations  89 

of  1 863 ;  therefore  matters  were  not  yet  in  good 
shape  for  the  bankers  and  bullionists.  But  in 
1 864  their  plans  were  perfected  to  run  up  gold 
to  the  highest  premium.  Mr.  Fessenden,  who 
was  then  Secretary  of  the  Treasury,  pronounced 
the  action  very  unpatriotic.  United  States 
Bonds  bearing  6%  interest  were  bought  at  this 
time  as  low  as  35  cents  on  the  dollar,  in  gold. 
(|Thus  the  bankers  and  bullionists  by  depress- 
ing the  value  of  United  States  Bonds  were  en* 
abled  to  buy  them  at  this  low  price  to  establish 
national  banks  in  this  Country. 
€|  In  order  to  show  that  National  Banks  were  not 
instituted  as  a  war  measure  for  relief  of  the  peo- 
ple, an  examination  will  disclose  that,  on  July  1 , 
1 865,  after  the  close  of  the  war,  there  were  only 
$146,366,030  bank  notes  issued.  Thus  these 
banks  of  issue  were  foisted  upon  the  United 
States  at  a  time  when  they  were  neither  desired 
nor  needed.  The  whole  purpose  of  those  back  of 
the  Scheme  was  to  prevent  the  Government 
from  exercising  its  constitutional  function  to  is- 
sue money  in  order  that  the  banks  might  usurp 
that  power. 

€JThe  question  involved  was  one  entirely  as  to 
the  quantity  of  money  to  be  issued.  Will  any- 
one contend  that  the  United  States  at  that  time 
could  not  have  sustained  the  value  of  and  re- 
deemed all  the  full  legal  tender  dollars  necessary 
to  meet  the  expenses  of  the  war  when  the  rail- 
roads alone  in  the  United  States  have  made 
themselves  responsible  for  the  payment,  dollar 
for  dollar,  of  about  9  billion  dollars  of  bonds  and 
8  billion  dollars  of  stock.  The  former  would 
have  been  secured  upon  the  entire  wealth  or  as- 
sets of  the  United  States,  and  the  latter  simply  on 


90  Called  National  Banks 

the  railroad  properties  and  their  earning  powers. 
CJThe  development  of  the  United  States  after 
the  war  is  the  conclusive  answer. 
CJIn    1865 — total  money  in  circulation  in  the 
United    States    was    $770,129,755,    and  only 
reached  as  high  as  $774,445,61  0  in  1873— or  a 
per  capita  circulation  of  $1  8.04. 
flln     1865— National    Wealth— $22,067,472,- 
000. 

€J  Population— 34,748,000. 

IJWill  anyone  contend  that,  with  a  national 
wealth  of  over  22  billion  dollars,  with  a  popula- 
tion of  over  thirty-four  million  in  a  country  pro- 
ducing everything  the  human  family  requires, 
the  United  States  was  not  justified  in  issuing  an 
increase  of  full  legal  tender  money  to  meet  the 
needs  of  the  Government,  when  it  is  shown 
that  the  National  wealth  increased  to  over  $32,- 
000,000,000  by  1  873  and  its  population  to  41 ,- 
677,000? 

<|  Instead  of  the  United  States  issuing  its  full 
legal  tender  money  redeemable  in  its  entire  Na- 
tional wealth,  which  was  increasing  faster  than 
that  of  any  other  country,  and  the  services  of 
more  than  thirty-four  million  people  working  in 
the  most  productive  country  in  the  world,  Con- 
gress authorized  Banking  Corporations  to  issue, 
indirectly,  a  spurious  National  Currency,  yet 
based  upon  the  National  wealth,  in  the  form  of  a 
United .  States  Bond,  payable  by  the  people  in 
gold,  with  interest — and  thus  allowed  the  money 
lenders  to  control  the  Money  System  of  the 
United  States. 

C|f  Previous  to  1865  Lord  Goschen,  the  leading 
English  authority  on  money  and  foreign  ex- 
change, fully  realized  it,  and  stated: 


Money-Lending  Corporations  91 

CJ  "What,  it  may  be  asked,  will  be  the  value  of 
gold  to  them — the  people  of  the  United  States — 
if  they  neither  require  it  for  internal  circulation, 
which  they  may  think  can  be  managed  as  well 
by  paper,  nor  for  payment  for  foreign  liabilities 
from  which,  under  our  hypotheses,  they  will  be 
comparatively  free." 

CJZach  Chandler,  a  high  Republican  authority, 
made  this  statement  on  April  29th,  1869;  see 
Congressional  Globe,  page  1  850. 
CJ"I  move  to  strike  out,  after  United  States, 
'elsewhere/  I  am  opposed  to  contracting  a  for- 
eign loan  under  any  circumstances.  We  have 
gone  through  the  war  without  borrowing  one 
dollar  from  abroad.  If  our  bonds  have  gone 
abroad  it  is  because  the  money  was  sent  here  to 
buy  them  and  take  them,  but  I  am  opposed  now 
to  applying  to  the  English  stock  exchange  or  any 
foreign  stock  exchange,  hat  in  hand,  begging 
that  they  will  now,  that  we  do  not  need  it,  loan 
to  us  a  little  money.  We  have  shown  our  ability 
to  carry  this  debt,  and  I  am  opposed  to  contract- 
ing a  loan  anywhere." 

CJ  Salmon  P.  Chase,  Ex-Secretary  of  the  United 
States  Treasury,  admitted: 

tjf"My  agency  in  procuring  the  passage  of  the 
national  banking  act  was  the  mistake  of  my  life. 
It  has  built  up  a  monopoly  that  affects  every  in- 
terest in  the  country.  It  should  be  repealed.  But 
before  this  can  be  accomplished  the  people  will 
be  arrayed  on  one  side  and  the  banks  on  the 
other  in  a  contest  such  as  we  have  never  seen  in 
this  country." 

CJF.  J.  Scott,  in  the  North  American  Review  of 
September,  1885,  set  forth  in  graphic  language 
the  power  of  this  banking  institution  against 


92  Called  National  Banks 

which  the  masses  are  protesting.  He  said:  "The 
unity  of  the  national  banking  interest  threatens 
the  corruption  and  control  of  the  machinery  of 
political  parties.  Its  power  is  omnipresent.  It 
is  subtle  and  strong  to  maintain  laws  for  its  own 
private  profit.  The  Jesuits  of  two  centuries  ago 
had  no  more  efficient  organization  for  con- 
trolling with  unseen  hand  the  governments  un- 
der which  they  lived. 

CJ  Behold  our  banking  association  changed  in  the 
twinkling  of  an  eye  from  one  having  one  hun- 
dred thousand  dollars  of  its  own  money  to  invest, 
to  one  with  that  amount  securely  invested,  and 
ninety  thousand  dollars  more  in  hand  to  lend. 
Was  ever  ninety  thousand  dollars  more  deftly 
taken  in?  Were  this  pretty  subsidy  the  only  ob- 
jection to  the  system,  it  migh  be  let  alone;  *  *  * 
but  the  principle  upon  which  the  system  is 
founded  is  dangerous  to  the  stability  of  business 
and  steadiness  of  values. 

Cf  In  Congress,  where  alone  this  power  may  be 
modified  or  destroyed,  a  large  number  of  mem- 
bers of  both  Houses  are  officers  and  stockholders 
of  the  National  Banks,  and  have  not  yet  been 
known  from  any  delicate  appreciation  of  their 
public  duties  to  refrain  from  voting  on  questions 
concerning  the  banks  on  account  of  having  pri- 
vate interests  therein." 


ANALYSIS  OF  THE  PROPOSED  MORGAN- 
ROTHSCHILD  S-ALDRICH  MONEY 
TRUST  BILL— MISNAMED  THE  "NA- 
TIONAL RESERVE  ASSOCIATION  OF 
THE  UNITED  STATES." 

EC.  1 .  The  proposed  Bill  to  incorpo- 
rate the  National  Reserve  Associa- 
tion of  the  United  States  asks  the 
Congress,  or  the  people  of  the 
United  States,  to  grant  them,  as  a 
private  banking  and  money-lending 
corporation,  a  charter  for  the  term  of  fifty 
years — First,  to  have  an  authorized  capital  of 
20%  of  the  banks  now  capitalized  at  $2,000,- 
000,000,  as  all  of  them  will  be  forced  into  mem- 
bership of  this  association  by  the  very  dominat- 
ing power  asked  to  be  conferred  upon  it  by  the 
sovereign  power  of  the  people  of  the  United 
States, — making  it  "The  National  Reserve  As- 
sociation of  the  United  States"  —thus  by  start- 
ing with  only  one  hundred  million  dollars  of  its 
capital  paid  in  cash  by  the  Associated  banks,  of 
anybody's  money.  The  other  one  hundred  mil- 
lion subscribed,  and  to  be  paid  only  when  they 
themselves  require  it,  puts  this  incorporated 
Company  of  bankers  in  position  to  start  business 
as  follows — 

20%  of  the  paid  in  capital  of  all 

banks  eligible  for  membership 

about $400,000,000 

Cash  Capital  paid  in 100,000,000 


94  The  Money  Trust  Exposed 

Cash   deposited  without   interest 

by  U.  S.  Treasury 356,000,000 

$856,000,000 

Note  issue  grant  by  U.  S.  Govern- 
ment without  charge 900,000,000 

Note  issue  additional — Charge  of 

\\% 250,000,000 

$2,106,000,000 

CJ  To  be  loaned  back  to  the  people  granting  them 
this  privilege;  and  inflated  with  hundreds  of 
millions  of  bank  credits. 

<|Sec.  23.  Provides  that  all  the  receipts  of  the 
Government,  amounting  to  hundreds  of  millions 
of  dollars  in  cash,  shall  be  deposited  with  this  in- 
corporation of  banks  without  interest;  on  the 
other  hand,  all  the  disbursements  made  for  the 
Government  will  sooner  or  later  be  paid  by  the 
checks  of  this  banking  corporation. 
tJThis  in  addition  to  turning  over  to  it  without 
charges  the  general  cash  funds  of  the  Govern- 
ment. 

fJBy  this  operation  the  people  lose  the  interest 

on  this  tremendous  amount  of  money  owned  by 

them. 

€J  But  this  absurdity  goes  further  and  allows  this 

money  monopoly  to  lend  this  money  back  to  the 

people  who  own  it  for  all  they  can  extort  from 

them. 

<J  It  is  even  worse  than  this.  By  turning  the  sur- 
plus money,  in  the  United  States  Treasury,  over 
to  this  Corporation,  it  offers  a  premium  to  them 
to  increase  the  taxes  of  the  people  to  increase  the 


Senate  Bill  4431   to  Incorporate          95 

surplus,  or  force  the  issue  of  bonds,  to  add  to  this 
surplus,  to  be  used  by  them  free  of  interest. 
€JSec.  10.  Provides  for  the  organization  of  a 
close  corporation  to  manage  and  control  the 
money  of  the  people  of  the  United  States 
through  this  so-called  National  Reserve  Associa- 
tion, while  a  thin  attempt  is  made  to  mislead  the 
people  by  saying  that  the  President  of  the  United 
States,  representing  the  people,  will  select  its 
governor.  Yet  they  effectually  say  that  he  can 
not  make  any  selection,  but  will  have  to  desig- 
nate one  out  of  the  three  names  they  themselves 
select,  any  one  of  whom  would,  of  course,  be  sat- 
isfactory— otherwise  they  would  not  send  his 
name  in. 

€JThe  two  deputy  governors  being  selected  by 
the  board  itself,  and  the  board  of  directors  ap- 
point the  other  officers. 

(JThis  plan  effectually  shuts  out  any  influence 
of  the  people  over  the  Organization. 
<JWhy  call  this  incorporation  of  banking  and 
money-lending  associations  of  men,  "The  Na- 
tional Reserve  Association  of  the  United 
States"  ?  Its  very  name  is  a  lie  on  its  face,  and  a 
deliberate  attempt  to  use  the  great  seal  and  sov- 
ereignty of  this  Republic  to  swindle  the  people 
and  create  a  money  trust  to  control  the  circulat- 
ing medium,  money,  which  puts  the  business  of 
the  people  entirely  at  their  mercy. 
<J  No  regard  is  shown  to  the  sovereignty  of  the 
States  or  state  lines.  This  money-lending  cor- 
poration subdivides  and  farms  out  the  different 
sections  of  the  United  States  according  to  their 
own  interest,  and  by  withdrawing  or  withhold- 
ing money  or  credit  from  any  section  can  dry  up 
its  arteries  of  trade  and  transfer  its  business  to 


96  The  Money  Trust  Exposed 

some  other  locality  in  which  the  moneyed  men 
controlling  the  funds  are  more  interested. 
If  With  this  control  would  rest  the  business  fate 
of  communities. 

€JThe  people  of  the  different  states  would  have 
no  control  over  this  private  monopoly  of  the 
money  of  the  United  States,  and  by  the  power  to 
discriminate  and  withhold  money,  and  credit 
from  a  sovereign  state,  this  money  Trust  could 
control  its  business  and  political  future. 
Cf  Sec.  25.  By  the  operation  of  this  section  this 
so-called  National  Reserve  Association  will  get 
the  use  of  all  the  reserves,  and  surplus  of  deposit- 
ing banks,  without  paying  them  any  interest 
upon  same. 

CJSec.  24.  The  power  is  here  given  to  deal  and 
speculate  in  the  debts  of  the  United  States  and 
all  the  states  of  the  Union.  These  have  al- 
ways been  the  coveted  securities  of  the  money 
lenders  of  the  Old  World.  The  house  of  Roths- 
childs was  established  by  committing  a  national 
fraud  upon  the  English  people,  in  order  to  secure 
their  Government  bonds  at  the  lowest  possible 
price,  and  in  order  to  do  so  the  founder  of  this 
house  coined  a  deliberate  lie;  he  hurried  from 
the  field  of  battle  to  London  and  stated  that  Lord 
Wellington  had  been  defeated  in  the  battle  of 
Waterloo,  thus  destroying  the  value  of  the  bonds 
before  buying  them.  The  money  lenders  encom- 
passed England's  financial  bondage  through 
credit  money  issued  on  debts,  which  is  the  primal 
cause  of  all  her  industrial  troubles  of  today,  and 
will  eventually  destroy  the  English  Govern- 
ment. 
€|  It's  the  inevitable  result  of  a  money  system  in 


Senate  Bill  443 1   to  Incorporate          97 

favor  of  banking  associations  and  money  lenders 
instead  of  the  whole  people. 

1}  The  fortunes  of  this  one  family  of  money  lend- 
ers, the  Rothschilds,  is  now  estimated  at  $3,000,- 
000,000,  while  on  the  other  hand  millions  of  the 
real  working  people  of  England  are  unable  to  get 
their  daily  bread. 

If  Thus  the  money  lenders  rivet  their  control 
over  the  policies  of  nations.  Governments, 
States  and  individuals  alike  are  enslaved  by 
debts,  for  bonds  mean  bondage,  and  it  is  the 
world-old  story  of  the  debtor  and  creditor.  The 
accumulation  of  debt  will  destroy  a  Nation  as  an 
individual. 

€J Sec.  24.   Also  contains  the  following: 
fj  #  #  #  "The  purchase  or  sale  of  securities  of  for- 
eign governments  or  gold  coin  or  bullion*" 
<JThis  lends  the  endorsement  of  this  Republic 
to  this  chain  of  incorporated  banks  to  use  the 
money  of  the  people  of  the  United  States  to  buy 
the  bonds  and  securities  of  the  practically  bank- 
rupt countries  of  Europe,  while  thousands  in  the 
United  States  are  denied  the  use  of  money  in  pro- 
ductive and  legitimate  enterprises. 
^  It  is  now  a  well-known  fact  that  most  of  the 
foreign  governments  can  only  pay  the  interest 
on  their  National  Debts  and  are  absolutely  un- 
able to  pay  the  principal. 

€JThe  National  Debt  of  Great  Britain  alone 
amounts  to  $6, 1  96,038,685. 

<J  Now  we  come  to  this  gold  swindle  *  *  *  "pur- 
chase and  sell  gold  or  bullion."  Read  all  the 
proceedings  of  the  International  Conferences  on 
money  and  you  will  easily  detect  in  this  the  un- 
mistakable ear-marks  of  the  Rothschilds'  Bank 
of  England  and  the  International  banking  houses 


98  The  Money  Trust  Exposed 

of  Belmont,  Morgan  &  Company  co-operating 
with  them.  This  is  confirmed  in  unmistakable 
terms  in  all  the  correspondence  between  them 
and  the  United  States  Treasury  since  1  865,  in  re- 
gard to  bonds  and  gold  payments,  whereby 
they  prevented  the  United  States  Government 
from  issuing  money  in  the  interest  of  the  people. 
tJSec.  26.  Provided  that  the  National  Reserve 
Association  will  only  rediscount  the  paper  of 
banks  having  a  deposit  with  it.  This  means  that 
any  bank  failing  to  keep  its  surplus  funds  depos- 
ited with  it  in  time  of  prosperity  will  have  to 
stand  alone  in  times  of  adversity,  and  go  into 
bankruptcy  if  a  run  is  made  on  it. 
(^  This  power  is  sufficient  to  dominate  or  destroy 
every  small  bank  throughout  the  country. 
CfSecs.  27  &  28.  Give  the  banks  depositing 
with  the  National  Reserve  Associations  advan- 
tage over  independent  banks  and  would  enable 
them  to  do  a  much  larger  business  on  the  same 
amount  of  money,  and  by  being  able  to  redis- 
count their  paper  make  larger  loans  and  increase 
the  opportunity  of  those  controlling  the  money 
of  the  bank,  and  engaged  in  underwriting  stocks 
and  bonds  of  Industrial  and  other  corporations, 
for  their  individual  profits. 

§  Sees.  48  &  49.  Provide  for  the  retirement  of 
National  Bank  Notes  by  the  substitution  of  the 
notes  of  this  so-called  National  Reserve  Associa- 
tion or  Money  Trust  with  the  further  power  to 
"issue  further  notes  from  time  to  time  to  meet 
the  business  requirements,  it  being  the  policy  of 
the  United  States  to  retire  as  rapidly  as  possible, 
consistent  with  the  public  interests,  bond  se- 
cured circulation  and  to  substitute  therefor 
notes  of  the  National  Reserve  Association  of 


Senate  Bill  443 1   to  Incorporate          99 

character  and  secured  and  redeemed  in  the  man- 
ner provided  for  in  this  act.  Stripped  of  its  mis- 
leading verbiage,  this  simply  means  that  the 
United  States  surrenders  to  this  money  lending 
and  money  manipulating  monopoly  its  sover- 
eign power  to  create,  issue  and  regulate  the 
value  of  money. 

tj  There  is  no  such  thing  as  money  without  the 
imprint  upon  it  of  the  great  law  of  legal  tender, 
which  can  only  be  given  it  by  an  act  of  sov- 
ereignty. 

ff  Yet  this  highest  act  of  sovereignty,  which  obli- 
gates the  property  and  services  of  the  94,000,- 
000  people  in  the  United  States  for  its  money  re- 
demption, is  to  be  transferred  by  the  representa- 
tives of  the  people  to  this  incorporated  bankers' 
association,  in  order  that  they  may  issue  credit 
money  as  a  substitute,  thereby  establishing  a 
Money  System  by  which  the  bankers  will  pros- 
per and  rule  instead  of  the  people. 
€J  Now  I  will  show  that,  after  granting  this  mo- 
nopoly over  money  and  thereby  giving  almost 
unlimited  power  to  a  corporation  to  exploit  the 
people,  the  people  themselves  are  bound  to  re- 
deem this  credit  money  in  gold  even  if  they  have 
to  issue  bonds  and  increase  the  public  debt  with- 
out end  in  order  to  do  it. 

CJ  Mark  carefully  this  apparently  careless  refer- 
ence in  Sec.  52  of  this  bill  "The  circulating  notes 
of  the  National  Reserve  Association  *  *  *  shall 
be  redeemed  in  lawful  money  on  presentation  at 
the  head  office  of  said  association  or  any  of  its 
branches.  It  shall  be  the  duty  of  the  National 
Reserve  Association  to  maintain  at  all  times  the 
parity  of  value  of  its  circulating  notes  with  the 
standard  established  by  the  first  section  of  the 


1 00  The  Money  Trust  Exposed 

act  of  March  14,  1900,  entitled,  "An  act  to  de- 
fine and  fix  the  standard  of  value,  to  maintain 
the  parity  of  all  forms  of  money  issued  or  coined 
by  the  United  States." 

«IThis  is  the  act  of  Congress,  March  14,  1900, 
which  established  the  so-called  gold  standard, 
and  by  the  construction  of  the  United  States 
Treasury  the  redemption  of  all  other  kinds  of 
money  issued  in  gold  coin. 

CJ  Therefore,  according  to  this  construction,  the 
only  way  these  promises  to  pay  or  credit  money 
issued  by  this  Corporation  can  be  kept  at  a 
parity  is  by  redeeming  them  in  gold  coin. 
CjjThus  when  their  notes  are  presented  for  re- 
demption, this  so-called  National  Reserve  Asso- 
ciation will  either  have  accumulated  in  its  con- 
trol all  the  gold  and  gold  certificates  to  redeem 
them  or  use  the  endless  chain  operation  now 
available  to  raid  the  United  States  Treasury  of 
its  gold  even  to  the  extent  of  forcing  bond  issues 
upon  the  Government  to  replenish  the  gold  re- 
serve in  order  that  they  may  withdraw  it  to  re- 
deem their  notes. 

€J  As  a  matter  of  fact,  this  association  could  and 
would  in  a  short  time  hold  almost  all  forms  of 
money  issued  by  the  United  States  and  force 
their  promises  to  pay  or  credit  money  as  a  sub- 
stitute upon  the  people. 

fj  It  is  thus  shown  that  the  government,  while  re- 
fusing to  use  its  sovereign  power  directly  to 
create  and  regulate  the  value  of  money  in  the  in- 
terest of  the  whole  people,  would  delegate  this 
highest  act  of  sovereignty  to  a  money  monopoly, 
to  be  used  indirectly  to  issue  credit  money  as  a 
substitute  in  the  interest  of  bankers,  promoters 
and  manufacturers  of  debts  upon  the  people,  and 


Senate  Bill  4431   to  Incorporated:      ;IQI ', 

make  the  people  liable  for  the  redemption  of 
their  promises  to  pay  in  gold.  Under  the  oper- 
ation of  this  scheme,  war  is  no  longer  necessary 
to  force  the  issue  of  United  States  bonds  and 
perpetuate  the  public  debt,  in  order  that  the 
power  of  money  may  control  the  business  and 
political  future  of  the  United  States. 
<JThe  establishment  of  this  money  corporation 
would  not  only  make  it  the  master  of  the  market, 
but,  by  this  scheme  of  gold  redemption,  put  this 
money  monopoly  in  position  to  throw  the  whole 
country  into  a  panic  at  any  time,  and  reap  a  har- 
vest from  the  wreckage  thus  created. 
^[Sec.  53.  Provides  that  the  notes  of  this  asso- 
ciation, "promises  to  pay,"  shall  be  received  by 
the  United  States  at  par  for  all  taxes,  etc.  Yet 
this  credit  concern,  after  using  its  notes  to  buy 
the  $712,170,320  of  United  States  Bonds  (See 
Sec.  49)  declines  to  accept  its  own  notes  for 
their  payment  or  redemption  and  requires  these 
bonds,  when  owned  by  them,  to  be  paid  for  spe- 
cifically in  gold  coin  of  the  United  States.  Sec. 
55.  Goes  on  to  provide  that  upon  application  of 
the  National  Reserve  Association  the  Secretary 
of  the  Treasury  shall  exchange  these  bonds  bear- 
ing 2%  interest  for  bonds  bearing  3%  interest  and 
to  run  for  50  years,  principal  and  interest  pay- 
able in  gold  coin  of  the  United  States. 
€][This  means  the  Corporation  is  allowed  to  buy 
at  par  the  2%  bonds  of  the  United  States,  with  its 
notes  that  cost  them  nothing  to  issue,  and  these 
bonds  are  immediately  replaced  by  the  Secre- 
tary of  the  Treasury  with  3%  bonds  of  the  United 
States  to  run  for  50  years.  Thus  the  people, 
through  their  representatives  in  Congress,  would 
be  placed  in  the  absurd  attitude  of  giving  this 


The  Money  Trust  Exposed 

corporation  $712,170,320  of  United  States 
Bonds  earning  3%  and  convertible  into  cash  at 
anytime  for  the  non-interest-bearing  promises  to 
pay  of  this  money-lending  Corporation.  Mark 
carefully  the  following:  "The  National  Reserve 
Association  shall  issue,  on  the  terms  herein  pro- 
vided, its  own  notes  as  the  outstanding  notes  se- 
cured by  such  bonds  so  held  shall  be  presented 
for  redemption  and  may  issue  further  notes  from 
time  to  time  to  meet  business  requirements,  it 
being  the  policy  of  the  United  States  to  retire  as 
rapidly  as  possible,  consistently  with  the  public 
interest,  bond-secured  circulation  and  to  substi- 
tute therefor  notes  of  the  National  Reserve  Asso- 
ciation secured  and  redeemed  in  the  manner  pro- 
vided for  in  this  act. 

tj  This  Bill  gives  to  this  corporation  the  absolute 
power,  entirely  independent  of  the  Government, 
to  inflate  or  contract  the  currency,  the  circulat- 
ing medium  of  exchange  upon  which  the  busi- 
ness of  the  people  of  this  country  absolutely  de- 
pends. 

<}The  future  of  this  Republic  is  thus  virtually 
placed  in  their  hands — 

«JSec.  ^50.  Provides  only  that  the  "Credit 
Money"  promises  to  pay  issued  by  this  corpora- 
tion are  to  be  covered  by  the  $71  1,170,320  of 
bonds  of  the  United  States  upon  which  they  earn 
3%  interest,  paid  by  taxing  the  people,  to  whom 
they  loan  the  $7 1  1 , 1  70,320  for  the  highest  rate 
of  interest  they  can  exact,  ranging  from  6%  to 
10%  on  commercial  paper,  and  large  commis- 
sions when  used  in  financing  or  underwriting  in- 
dustrial schemes  and  building  up  Trust  Com- 
binations to  exploit  the  people. 


Senate  Bill  4431   to  Incorporate        103 

^f  All  additional  note  issues  or  credit  money  put 
out  by  this  Corporation  can  be  covered  by  one- 
third  of  the  amount  in  gold  and  by  notes  or  bills 
of  exchange  arising  out  of  commercial  transac- 
tions for  two-thirds. 

IJIt  would  only  be  necessary  for  this  corpora- 
tion to  hold  in  its  banks  the  promises  to  pay  al- 
ready issued  by  the  Government,  also  the  real 
money  or  legal  tender  dollars  deposited  with 
them  by  the  people,  and  put  out  its  "credit 
money"  notes  in  place  of  those  in  the  channels  of 
trade  and  commerce.  This  would  put  it  in  a  posi- 
tion to  take  the  silver  certificates  and  other  prom- 
ises to  pay  issued  by  the  Government  and  ex- 
change them  for  gold.  In  this  way  it  could  easily 
collect  practically  all  the  gold  in  the  monetary 
system  of  the  United  States. 

€jlt  could  then  use  the  stocks  and  bonds  of  In- 
dustrial Corporations  or  any  miscellaneous  as- 
sets held  by  it  adding  one-third  in  gold  and  issue 
its  notes  as  money  for  the  full  amount  of  same. 
if  As  there  is  so  much  gold  in  the  United  States, 
$  1 ,797,62 1 ,05  1  (See  Director  of  the  Mint,  page 
43,  1911),  this  corporation  could  easily  acquire 
90%  of  the  whole,  which  would  enable  it  to  issue 
$4,853,576,838  free  of  charge  and  add  to  this 
indefinitely  by  buying  or  borrowing  gold  as  this 
bill  authorizes,  including  foreign  coin  and 
bullion  in  itself  not  worth  more  than  50  cents  on 
the  dollar. 

ff  Here  we  have  the  climax  of  the  gold  confi- 
dence-game. This  Money  Trust  holding  prac- 
tically all  the  gold  in  the  United  States  and  the 
outstanding  obligations  among  the  people,  spe- 
cifically payable  in  gold,  amounting  to  over 
twenty  billion  dollars  are  in  complete  control. 


1 04  The  Money  Trust  Exposed 

<J  Imagine  for  one  moment  the  effect  upon  the 
value  of  gold,  as  measured  in  the  fall  of  prices  of 
other  things  when  a  general  demand  is  made  for 
gold  payments  of  these  obligations. 
€J  No  man  can  measure  the  ruin  that  would  fol- 
low, and  no  man  can  measure  the  harvest  to  be 
gathered  by  the  holders  of  the  gold. 


MORGAN.  ROTH  SCHILDS- ALDRICH 
MONEY  TRUST  BILL— NOW  PENDING 
IN  CONGRESS,  AND  ENDORSED  BY 
"THE  NATIONAL  MONETARY  COMMIS- 
SION"—THE  MISUSE  OF  THE  WORD 
"PARITY"— THEIR  LAST  HOPE  OF 
FOOLING  THE  PEOPLE. 


N  the  careful  investigation  I  have 
made,  for  thirty  years,  of  the 
money  question,  I  find  that  the  peo- 
ple have  been  imposed  upon  by 
those  constructing  and  developing 
the  money  system  by  assuming 
false  premises  and  clothing  them  in  technical 
words  and  sophistry,  and  then  having  them  en- 
dorsed by  men  in  high  official  positions,  and  with 
the  prestige  of  so-called  financial  authorities. 
There  is  no  more  conspicuous  example  of  this 
than  is  found  in  the  injection  of  the  metal  gold 
into  our  money  unit  or  dollar,  trying  to  make  the 
people  believe  that  gold,  the  metal,  is  the  unit 
of  value,  instead  of  the  dollar.  The  25  and  8- 1 0 
grains  of  gold  is  not  the  money  unit  of  the  United 
States,  nor  is  it  in  any  sense  the  standard  of  value 
of  the  purchasing  power  of  our  money  unit  the 
dollar.  This  false  assumption  is  based  upon  the 
exploded  theory  that  there  is  intrinsic  value  in 
gold,  and  denies  the  universally  recognized  fact 
that  the  value  of  the  dollar,  like  everything  else, 
is  regulated  by  the  law  of  demand  and  supply. 
Therefore,  it  is  the  number  of  dollars  or  money 
units  in  the  monetary  system  that  fixes  the  value 
or  purchasing  power  of  each  unit  and  constitutes 
the  standard  of  value.  It  is  the  demand  for  dol- 


1 06  Parity  Fraud  the  Last  Hope 

lars  which  gives  them  their  value,  establishes 
their  equality,  or,  as  the  parrots  in  finance  desig- 
nate it,  "parity  of  our  dollars."  To  create  any  in- 
equality or  difference  in  the  value  or  purchasing 
power  of  these  dollars,  you  would  have  to  change 
the  number  of  cents  in  the  money  unit  or  dollar 
itself  which  is  an  absurdity  on  its  face.  The  law 
simply  says  if  gold  is  to  be  coined  into  a  money 
unit,  or  dollar,  it  shall  be  first  weighed  by  the 
lawful  standard  weight  kept  at  the  mint,  in  other 
words,  it  shall  not  be  less  than  25  and  8-10 
grains  of  gold  to  each  dollar. 
€JIt  is  therefore  plain  to  any  one  of  common 
sense  that  the  grains  of  gold  in  this  dollar  is  not 
the  money  unit  or  dollar  itself  or  in  any  sense  a 
standard  of  value  for  other  things. 
€J  In  order  to  fully  appreciate  the  meaning  and 
potent  significance  of  Section  52  in  this  Bill,  it  is 
necessary  to  trace  the  development  of  this  so- 
called  gold  standard  as  finally  consummated  in 
the  Act  of  March  14,  1900. 

€J  The  United  States  mint  was  established  by  the 
act  of  Congress  April  2nd,  1  792,  and  it  provides 
in  Sec.  9  "That  there  shall  be  from  time  to  time 
struck  and  coined  at  the  said  mint,  coins  of  gold, 
silver  and  copper,  of  the  following  denomina- 
tions, values  and  descriptions,  viz.,  Eagle  — each 
to  be  of  the  value  of  ten  dollars  or  units,  and  to 
contain  247  and  4-8  grains  of  pure  standard  gold. 
CJ  Dollars  or  units  each  to  be  of  the  value  of  a 
Spanish  mill  dollar  as  the  same  as  now  current. 
And  to  contain  371  grains  and  4-16  parts  of  a 
grain  of  pure  silver.  Half  dollars,  each  to  be  of 
half  the  value  of  the  dollar  or  unit." 
CJSec.  1 6.  "And  be  it  further  enacted,  That  all 
the  gold  and  silver  coins  which  shall  have  been 


Of  Fooling  the  People  1 07 

struck  at,  and  issued  from,  the  said  mint,  shall 
be  a  lawful  tender  in  all  payment  whatsoever." 
tJSec.  20.  "And  be  it  further  enacted,  That  the 
money  of  account  of  the  United  States  shall  be 
expressed  in  dollars  or  units,  dimes  or  tenths, 
cents  or  hundredths,  and  mills  or  thousandths. 
A  dime  being  the  tenth  part  of  a  dollar.  A  cent 
the  hundredth  part  of  a  dollar.  A  mill  the  thous- 
andth part  of  a  dollar.  And  that  all  accounts  in 
the  public  offices  and  all  proceedings  in  the 
courts  of  the  United  States  shall  be  kept  and  had 
in  conformity  to  this  regulation." 
CfThis  act  establishes  one  dollar  as  the  legal  unit 
of  value  and  says  that  when  gold  or  silver  is 
coined  into  money  each  dollar  or  unit  shall  con- 
'tain  so  many  grains  of  gold  or  silver  according 
to  the  standard  used  at  the  mint  for  weighing 
same. 

tjln  the  very  beginning  of  this  subject  should 
be  clearly  borne  in  mind  the  vital  difference  be- 
tween the  dollar  or  money  unit,  and  the  metal, 
gold  or  silver. 

If  The  dollar  or  money  unit  is  the  creation  of  the 
sovereign  power  of  the  people  and  binds  them 
and  their  property  to  protect  its  value  and  to  re- 
deem it  at  par. 

€J  In  other  words,  it  is  a  legal  tender  for  all  things 
on  sale,  all  services  for  hire,  and  all  debts,  public 
and  private.  This  means  that  94,000,000  peo- 
ple in  the  United  States  stand  ready  to  receive 
it  and  redeem  it  at  one  hundred  cents  on  the  dol- 
lar. In  fact,  its  money  value,  which  is  its  pur- 
chasing and  debt  paying  power,  would  be  the 
same  if  it  did  not  have  one  grain  of  gold  in  it. 
C|To  say  that  the  equality,  validity  or  purchas- 
ing power  of  the  full  legal  tender  dollar  of  the 


1 08  Parity  Fraud  the  Last  Hope 

United  States  redeemable  all  alike  in  $  1 34,000,- 
000,000  dollars  of  the  National  wealth,  includ- 
ing all  the  gold  and  silver  that  we  now  have  in 
the  United  States  or  will  ever  have,  and  the 
service  of  94,000,000  of  the  most  enterprising 
and  productive  people  in  the  world,  depends  for 
its  equality  or  parity  upon  the  gold,  in  the  dollar, 
is  an  absurdity  only  surpassed  by  the  miserable 
subterfuge  that  $1  50,000,000  held  as  a  reserve 
in  the  United  States  Treasury  maintains  the 
parity  or  equality  of  all  our  dollars.  So  long  as 
it  is  a  money  unit  or  dollar  the  value,  purchasing 
power,  must  necessarily  be  the  same.  It  is 
equivalent  to  saying,  if  these  $150,000,000  set 
aside  in  the  Treasury  were  to  go  into  circulation 
and  take  the  place  of  bank  notes  there  would  be 
a  different  purchasing  power  in  our  money  units 
or  dollars. 

CJ  (Up  to  this  time  the  United  States  Mint  was 
a  temporary  institution  and  its  life  periodically 
extended,  until  this  act  of  1873,  the  damnable 
beginning  of  the  establishment  of  the  so-called 
gold  standard  when  it  was  made  a  part  of  this 
scheme,  a  Bureau  of  the  United  States 
Treasury. ) 

fjfThis  act  of  Congress  was  passed  February  1  2, 
1873,  and  dropped  the  standard  silver  dollar 
from  coinage,  which  under  the  act  of  April  2, 
1 792,  establishing  the  mint  and  coinage  was 
designated  "Dollars  or  Units,  each  to  be  of  the 
value  of  the  Spanish  Milled  (Silver  Dollar)  as 
the  same  is  now  current,  and  to  contain  three 
hundred  and  seventy-one  grains  and  four  six- 
teenths parts  of  a  grain  of  pure,  or  four  hundred 
and  sixteen  grains  of  standard  Silver."  The  sil- 
ver dollar  was  dropped  from  coinage  in  the 


Of  Fooling  the  People  1 09 

1 5th  section  of  the  act  of  February  1 2, 
1 873  -  -  demonetizing  silver  —  and  the  gold 
dollar  substituted  in  section  14,  "that  the 
gold  dollar  piece,  which,  at  the  standard 
weight  of  25  8-10  grains,  shall  be  the  unit  of 
value.  An  Eagle,  to  be  of  the  value  of  ten  dol- 
lars or  units. 

<JSec.  52  of  the  Bill  of  the  proposed  National 
Reserve  Association  recites  "It  shall  be  the  duty 
of  the  National  Reserve  Association  to  maintain 
at  all  times  a  parity  of  value  of  its  circulating 
notes  with  the  standard  established  by  the  first 
section  of  the  act  of  March  1 4,  1  900.  This  first 
section  of  said  act  reads,  "That  the  dollar  con- 
sisting of  twenty-five  and  eight-tenths  grains  of 
gold  nine-tenths  fine,  as  established  by  Section 
3511  of  the  Revised  Statutes  of  the  United 
States,  shall  be  the  standard  unit  of  value,  and 
all  forms  of  money  issued  or  coined  by  the 
United  States  shall  be  maintained  at  a  parity  of 
value  with  this  standard,  and  it  shall  be  the  duty 
of  the  Secretary  of  the  Treasury  to  maintain 
such  parity.  "To  state  it  plainly,  one  dollar  must 
buy  as  much  as  another  dollar.  Mark  the  refer- 
ence," as  established  by  Section  3511  of  the  Re- 
vised Statutes  of  the  United  States."  This  is  the 
act  of  February  12,  1873,  demonetizing  Silver, 
and  substituting  gold.  Section  3511  reads, 
"That  the  gold  coin  of  the  United  States  shall 
be  a  one  dollar  piece,  which,  at  the  standard 
weight  of  25  8-10  grains,  shall  be  the  unit  of 
value."  Is  the  25  8-10  grains  of  gold  or  the  dol- 
lar the  unit  of  value? 

€JA  simple  answer  uncovers  and  exposes  their 
sophistry  and  deceit. 


1  1 0  Parity  Fraud  the  Last  Hope 

CJThe  unit  of  value  had  already  been  clearly  de- 
fined in  the  act  of  April  1  2,  1  792,  which  estab- 
lished the  unit  and  coinage  law  of  gold  and  silver. 
Section  20,  "And  be  it  further  enacted  that  the 
money  of  account  of  the  United  States  shall  be 
expressed  in  dollars  or  Units,  dimes  or  tenths, 
cents  or  hundredths,  part  of  a  dollar,  a  mill  the 
thousandth  part  of  a  dollar,  and  that  all  ac- 
counts in  the  public  offices  and  all  proceedings  in 
the  courts  of  the  United  States  shall  be  kept  and 
had  in  conformity  to  this  regulation." 
€J  In  order  to  annihilate  this  parity  fraud,  which 
has  exploited  the  people  of  this  country  out  of 
untold  millions,  and  is  now  being  used  by  the 
promoters  of  the  money  trust  to  fasten  upon 
the  United  States  the  most  infamous  money 
system  ever  conceived  to  ruin  this  repub- 
lic, and  to  expose  this  damnable  heresy, 
it  is  only  necessary  to  ask,  "What  con- 
stitutes the  standard?"  Is  it  the  258-10 
grains  of  gold  that  constitutes  the  dollar,  or 
money  unit,  or  the  act  of  sovereignty,  which 
creates  the  money,  and  says  one  dollar  is  thej 
unit  of  value?  If  our  mints  were  closed  to  the 
coining  of  gold  you  could  weigh  out  25  8-10 
grains  of  gold  and  six  months  later  it  would  not 
be  worth  50  cents;  yet  the  purchasing  power  or 
value  of  the  dollar,  or  money  unit,  would  be  un- 
changed. But,  when  the  sovereign  power  of  the 
United  States  says,  this  is  one  dollar,  the  money 
unit  of  the  United  States  and  pledges  one  hun- 
dred and  thirty-four  billions  of  dollars  of  Na- 
tional wealth  and  the  resources  of  94,000,000 
people  for  its  redemption  at  par  or  100  cents  in 
the  dollar,  you  have  the  best  and  soundest  money 
unit  in  the  world  without  one  grain  of  gold  in  it. 


Of  Fooling  the  People  1  1  1 

^f  These  money  schemers  would  make  this  coun- 
try continue  to  believe  that  the  25  8-10  grains 
of  gold  was  the  money  unit  and  standard  of  value 
in  order  to  make  permanent  their  banks  of  issue 
with  gold  redemption  and  thereby  control  the 
money  system  of  the  United  States. 
CJTo  make  it  more  explicit  and  so  plain  that  no 
man  can  refute  it: 

€JThe  lawful  money  of  the  United  States  is  cre- 
ated by  the  sovereign  power  of  its  people,  each 
dollar,  or  unit,  is  complete  in  itself,  each  has  the 
same  value,  the  same  purchasing  and  debt  pay- 
ing power, — their  equality  or  parity  is  neces- 
sarily the  same,  as  each  has  its  redemption  in  all 
the  property  and  service  of  the  people  without 
discrimination. 

<JThe  parity  or  equality  is  cemented  together  by 
an  unlimited  and  universal  demand  for  dollars 
because  they  do  the  work  of  dollars. 
€J  How  can  there  be  any  difference  between  the 
lawful  dollars  of  the  United  States,  all  doing  the 
same  work,  and  having  the  same  purchasing  and 
debt  paying  power? 

t|  The  demand  for  the  dollar  of  the  United  States 
is  the  greatest  ever  known  in  the  world,  bringing 
a  premium  over  gold  in  Europe. 
<J  Ninety-four  million  people  in  this  country 
place  an  incessant  and  unending  demand  upon 
them  for  their  services  and  support.  Over  sixty 
billion  of  debts  demand  them  for  payment.  The 
perpetual  call  for  interest  demands  them  with- 
out end.  Twenty-five  billions  of  internal  com- 
merce demand  their  services.  Europe  demands 
hundreds  of  millions  of  our  dollars  to  settle  her 
balance  of  trade  with  the  United  States. 


1  1 2  Parity  Fraud  the  Last  Hope 

t|I  would  ask  these  jugglers  of  words,  "Is  not 
this  demand  sufficient  to  preserve  the  parity  or 
equality  of  our  dollars?" 

if  For  men  of  average  intelligence,  claiming  to 
be  the  representatives  of  the  people,  to  deal  in 
such  unmeaning  nonsense  and  transparent 
sophistry  upon  this  vital  question,  hoping  that 
their  high  official  positions  will  induce  the  honest 
credulity  of  the  people  to  accept  it,  is  nothing 
short  of  criminal.  There  is  no  such  thing  as  in- 
trinsic value  of  gold,  and  the  value  of  gold,  like 
everything  else,  depends  upon  its  quantity  and 
the  demand  for  it,  which,  under  economic  laws 
and  conditions,  should  be  a  legitimate  demand. 
There  is  today  nothing  which  is  so  supported  in 
its  artificial  and  unjustifiable  value  as  gold. 
€J  There  is  a  legitimate  demand  in  the  arts  for 
only  one-third  of  the  supply  of  gold.  This  leaves 
an  annual  surplus  of  two-thirds,  the  value  of 
which,  when  demonetized,  would  shrink  50  per 
cent  of  its  present  value.  In  addition  to  this, 
there  is  an  accumulated  stock  of  over  seven  bil- 
lion dollars  of  gold  held  stored  away  in  the 
vaults  and  banking  institutions  of  the  world,  a 
dead  and  useless  economic  waste  and  burden 
upon  the  people.  It  is  about  time  for  the  people 
of  the  United  States  to  have  a  lucid  interval  and 
close  the  mints  of  this  country,  forever  destroy- 
ing the  metallic  basis  of  redemption  for  credit 
money — the  economic  curse  of  this  republic. 
f]j  Section  52  is  the  most  consummate  fraud  in 
the  Bill.  It  is  an  attempt,  on  the  part  of  this  in- 
corporated money  trust,  to  perpetuate  in  its  own 
interest  the  attempt  to  establish  the  so-called 
gold  standard  in  the  act  of  February  12,  1873, 
to  which  this  act  of  March  1 4,  1  900,  referred. 


Of  Fooling  the  People  1  1  3 

<|The  authors  of  this  National  Reserve  Associa- 
tion fail  to  quote  either  the  Acts  of  February  1  2, 
1873,  or  March  14,  1900,  although  essentially 
necessary  to  a  clear  understanding  of  this  Section 
52,  but  adroitly  content  themselves  with  giving 
an  absolutely  misleading  title  to  the  Act  of 
March  14,  1900. 

<JI  desire  the  reader  to  carefully  study  every 
word  in  this  section.  It  first  provides  that  the 
notes,  or  promises  to  pay,  issued  by  this  incor- 
porated Banking  Association,  shall  be  a  first  lien 
upon  its  miscellaneous  assets — now  mark  you 
"and  shall  be  redeemed  in  lawful  money  on 
presentation."  It  shall  be  the  duty  of  the  Na- 
tional Reserve  Association  to  maintain  at  all 
times  a  parity  of  value  of  its  circulating  notes 
with  the  standard  established  by  the  first  section 
of  the  Act  of  March  1  4,  1  900,  entitled  "An  Act 
to  define  and  fix  the  standard  of  value,  to  main- 
tain the  parity  of  all  forms  of  money  issued  or 
coined  by  the  United  States."  The  real  purpose 
here  is  to  permanently  establish  banks  of  issue 
and  gold  redemption,  subject  to  the  endless 
chain  process  to  raid  the  Treasury  with  promises 
to  pay,  and  force  the  issue  of  bonds  upon  the 
people  to  sustain  them. 

CJThe  sections  of  the  Act  of  February  12,  1  873, 
and  March  1 4,  1  900,  repeal  the  law  of  April  2, 
1  792,  Establishing  the  Money  System  of  the 
United  States,  viz.,  "That  the  money  of  the 
United  States  shall  be  expressed  in  dollars  or 
units."  Therefore  the  sections  of  the  Acts  re- 
ferred to  really  mean  that  one  dollar  shall  be 
the  unit  of  value,  nothing  more  and  nothing  less 
(and  all  the  rest  is  simply  an  attempt  by  those 
back  of  John  Sherman  and  Nelson  W.  Aldrich 


1  1 4  Parity  Fraud  the  Last  Hope 

to  continue  the  so-called  Gold  Standard  by  the 
improper  use  of  the  word  parity).  Now  that 
the  intrinsic  value  of  gold  will  no  longer  serve 
them,  they  have  engrafted  in  this  bill  this  subter- 
fuge. I  quote,  "maintaining  the  parity  of  value 
of  its  circulating  notes  with  the  standard  estab- 
lished by  the  first  section  of  the  Act  of  March 
14,  1  900,"  which  can  only  be  done  under  their 
theory  of  redeeming  them  in  gold.  The  ab- 
surdity of  this  is  found  in  the  fact  that  this  Act 
did  not  establish  a  money  standard  of  any  kind. 
There  is  only  one  standard  of  value  in  a  money 
system  and  it  is  constituted  by  the  number  of  dol- 
lars in  the  system.  The  value  of  a  dollar  is  made 
by  the  demand  for  dollars,  demand  operating 
against  the  supply. 

€J  Hence,  if  the  dollars  are  few,  and  the  demand 
great,  the  standard  of  their  value  is  high  and 
their  purchasing  power  great,  and  if  the  dollars 
are  many,  and  the  demand  small,  the  standard 
of  their  value  is  low,  and  their  purchasing  power 
small. 

<|The  value  of  a  dollar  or  money  unit  is  made 
by  the  demand  of  all  men  for  dollars,  demand 
operating  against  supply. 

€JThe  equality  or  parity  of  all  dollars  is  welded 
together  by  the  universal  demand  for  dollars,  as 
universal  orders  for  all  things  on  sale,  and  the  re- 
deemers of  debts.  What  occasion,  in  common 
sense,  is  there  for  a  man  preferring  one  lawful 
dollar  of  the  United  States  to  another  when  both 
have  the  same  purchasing  and  debt  paying 
power? 

tJTo  understand  thoroughly  a  fraud,  it  is  well  to 
trace  it  to  its  origin.  This  parity  fraud,  as  applied 
to  our  dollars,  is  found  in  the  Act  of  Congress 


Of  Fooling  the  People  115 

July  14,  1890.  This  Act  provides:  Section  1, 
"That  the  Secretary  of  the  Treasury  is  hereby  di- 
rected to  purchase,  from  time  to  time,  silver  bul- 
lion and  to  issue  in  payment  for  such  purchases 
Treasury  notes  of  the  United  States." 
<J  Section  2.  That  the  Treasury  notes  issued  in 
accordance  with  the  provisions  of  this  Act  shall 
be  redeemable  on  demand  in  coin  at  the  Treas- 
ury of  the  United  States  or  at  the  office  of  any 
assistant  treasurer  of  the  United  States  and, 
when  so  redeemed,  may  be  reissued, 
^f  That,  upon  the  demand  of  the  holder  of  any  of 
the  Treasury  notes  herein  provided  for,  the  Sec- 
retary of  the  Treasury  shall,  under  such  regula- 
tions as  he  may  prescribe,  redeem  such  notes  in 
gold  or  silver  coin,  at  his  discretion,  it  being  the 
established  policy  of  the  United  States  to  main- 
tain the  two  metals  on  a  parity  with  each  other 
upon  the  present  legal  ratio,  or  such  ratio  as  may 
be  provided  by  law." 

CJ  There  is  only  one  way  known  to  maintain  the 
parity  or  equality  of  dollars.  That  is  for  the 
Government  to  retain  the  option  of  paying  out 
either  gold  or  silver  to  suit  its  own  convenience. 
<J  France  has  always  maintained  the  parity  or 
equality  of  her  money  unit,  the  5-franc  piece,  by 
reserving  to  the  Bank  of  France  the  option  of 
paying  out  either  gold  or  silver  francs. 
€fM.  Pallian,  the  president  of  the  Bank  of 
France,  made  the  following  answers  on  this  point 
in  1  91 0:  Q.  "In  order  to  discourage  the  exporta- 
tion of  gold  does  the  Bank  of  France  sometimes 
exercise  the  right  it  possesses  to  refuse  payment 
in  gold  and  offer  to  pay  its  notes  in  silver?" 
€J  Ans.  l*The  Bank  of  France  cannot,  of  course, 
renounce  its  rights  to  redeem  its  notes  in  gold  or 


1  1 6  Parity  Fraud  the  Last  Hope 

silver,  since  gold  pieces  and  silver  coin  of  5  franc 
are  equally  legal  tender  in  France. 
CJ  "In  no  case,  however,  whatever  may  have  been 
said,  have  we  ever  charged  any  premium  on 
French  gold  in  redemption  of  notes."  Thus  the 
parity  or  equity  of  the  money  in  France  is  pro- 
tected, it  having  the  same  purchasing  and  debt 
paying  power  as  a  legal  tender.  And  the  ques- 
tion of  the  parity  or  equality  of  her  money  is 
never  considered." 

€|  It  has  been  well  said,  "This  mode  of  maintain- 
ing such  parity  is  the  only  mode  and  is  as  fixed 
as  the  first  problem  in  Euclid  and  has  been  longer 
in  vogue." 

€J  There  never  has  been  an  exception  to  it  in  the 
history  of  the  world.  To  maintain  the  parity  or 
equality  of  dollars  in  a  monetary  system,  it  is 
only  necessary  for  the  government  to  preserve 
the  right  or  option,  of  the  debtor  to  pay  in  either 
or  give  both  the  full  right  and  power  of  a  legal 
tender.  The  government  representing  the  peo- 
ple should  issue  nothing  but  full  legal  tender 
money. 

^f  All  other  dollars  are  a  hybrid  creation  in  a 
money  system,  and  should  be  eradicated. 
€JYou  will  notice  the  words  used  in  the  Act  of 
1  900  in  this  connection,  "It  being  the  established 
policy  of  the  United  States  to  maintain  the  parity 
of  the  metals  on  a  parity  with  each  other  upon 
the  present  legal  ratio"  (  1  6  to  1 ) . 
C|  There  is  no  mention  of  the  parity  of  the  Treas- 
ury notes  or  dollars  beyond  the  fact  that  these 
Treasury  notes  shall  be  redeemed  in  coin  at  the 
Treasury  of  the  United  States.  Gold  or  Silver, 
as  to  maintaining  the  parity  of  value  of  the 
metals,  gold  and  silver,  upon  the  "present  legal 


Of  Fooling  the  People  I  1  7 

ratio,"  was  a  fraud,  and  intentional  deception. 
As  the  act  itself  killed  the  parity  of  value  of  the 
metals  by  leaving  the  mints  open  to  the  unlimited 
coinage  of  gold,  which  created  an  unlimited  de- 
mand for  it  at  a  fixed  price  as  money,  while  the 
act  restricted  the  coinage  of  silver  at  the  mints, 
by  limiting  the  quantity  of  silver  to  be  used  as 
money,  which  created  only  a  limited  demand  for 
it,  which  absolutely  destroyed  the  parity  of  its 
value  with  gold,  as  the  surplus  of  silver  on  the 
market  fixed  its  metal  value.  Hence^jhe  fraud- 
ulent use  of  the  word  parity,  in  reference  to  the 
two  metals  in  this  Act  of  1 890,  is  easily  exposed. 
We  will  now  trace  this  parity  fraud  into  the  Act 
of  March  1 4,  1  900,  which  says,  resurrecting  the 
old  Act  which  demonetized  silver  February  1  2, 
1873,  and  substituted  the  gold  dollar  designated 
in  Section  35 1  1  R.  S.  U.  S.  which  says,  "And  all 
forms  of  money  issued  or  coined  by  the  United 
States  shall  be  maintained  at  a  parity  of  value 
with  this  standard,  and  it  shall  be  the  duty  of 
the  Secretary  of  the  Treasury  to  maintain  such 
parity." 

IJWhy  insert  here  the  words,  "All  forms  of 
money  issued  or  coined  by  the  United  States?" 
thus  making  the  word  parity  apply  to  paper 
when  it  was  intended  heretofore  to  apply  to  the 
value  of  the  metal  or  material  out  of  which  the 
dollar  was  made.  How  can  it  properly  apply  to 
the  parity  of  value  of  paper  and  gold?  Yet  they 
carry  this  obsolete  word  parity,  as  applied  to 
metals,  to  the  Act  of  1  890  and  apply  it  to  the 
money  unit  itself,  the  dollar,  instead  of  the  ma- 
terial. In  this  Act  of  1  890,  in  order  to  destroy  the 
parity  or  equality  of  value  of  the  Treasury  notes 


1  1 8  Parity  Fraud  the  Last  Hope 

issued,  they  limited  their  legal  tender  power, 
stating,  "And  such  Treasury  notes  shall  be  a 
legal  tender  in  payment  of  all  debts,  public  or 
private,  except  when  otherwise  expressly  stipu- 
lated in  the  contract."  As  most  of  the  bonds  is- 
sued in  the  United  States  on  Railroads  and  Cor- 
porations amounting  to  billions  of  dollars  are 
specifically  payable  in  gold,  its  full  legal  tender 
value  is  destroyed,  and  there  is  no  equality  or 
parity  left  in  it.  Then  follows  the  paradoxical 
absurdity  "That,  upon  the  demand  of  the  holder 
of  any  Treasury  Notes  herein  provided  for,  the 
secretary  of  the  Treasury  shall  redeem  such 
notes  in  gold  and  silver  coin,  at  his  discretion,  it 
being  the  established  policy  of  the  United  States 
to  maintain  the  two  metals  on  a  parity  with  each 
other  upon  the  present  legal  ratio  as  may  be  pro- 
vided by  law."  At  this  time,  1  890,  the  parity  of 
the  metals  has  been  absolutely  destroyed  by  de- 
monetization of  silver — and  its  price  steadily  de- 
clined from  75  cents  on  the  dollar  in  1  887  to  42 
cents  in  1  908— See  Report  Director  of  the  Mint, 
pg.  1  1 9,  1 909.  This  difference  being  so  great, 
the  word  parity  of  value  of  the  metals  gold  and 
silver  became  absurd,  and  had  to  be  abandoned. 
Hence  the  fraud,  devised  in  the  Bill  reported  by 
Aldrich,  entitled  the  National  Reserve  Associa- 
tion of  the  United  States,  in  which  they  keep 
alive  the  word  parity,  applying  it  to  the  paper 
credit  money  issued  by  this  association  of  Incor- 
porated Banks.  In  order  to  continue  the  fraud  of 
gold  redemption  and  banks  of  issue,  they  have 
the  following  inserted  in  Section  52.  "It  shall 
be  the  duty  of  the  National  Reserve  Association 
to  maintain  at  all  times  a  parity  of  value  of  its 
circulating  notes  with  the  standards  established 


Of  Fooling  the  People  1  1 9 

by  the  first  section  of  the  Act  of  March  14, 
1900." 

(JBy  injecting  this  word  parity,  this  Bankers' 
Trust  asks  the  Congress  of  the  United  States, 
representing  the  people,  to  allow  them  to  have  a 
monopoly  and  issue  their  promises  to  pay  by  the 
hundreds  of  millions,  for  the  people  to  pay  in- 
terest on  and  redeem  them  in  gold.  The  people 
would  prefer  the  Government's  issuing  its  per- 
fect money  units,  lawful,  full  legal  tender  dol- 
lars, redeemable  in  $139,000,000,000^  Na- 
tional Wealth  and  the  services  of  94,000,000 
people. 

^f  Since  the  words  "Intrinsic  value  of  gold"  and 
the  * 'Ratio  of  gold  and  silver"  can  no  longer  be 
used  to  divert  and  mislead  the  people;  the  ad- 
vocates of  "Banks  of  Issue"  have  made  their  last 
play  to  protect  the  false  basis  of  gold  redemption 
by  the  misuse  of  the  word  "Parity."  I  therefore 
hope  the  reader  will  see  the  vital  importance  of 
exposing  this  attempted  fraud  upon  the  people. 
€J  It  should  be  first  impressed  upon  the  mind  that 
a  dollar  is  not  a  debt,  but  a  redeemer  of  debt,  or 
that  one  dollar  should  not  be  redeemed  in 
another  dollar.  This  idea  is  an  invention  of  the 
money  lender — a  reversal  of  all  sound  ideas  of 
finance  that  ever  existed.  It  is  based  upon  the 
absurdity  that  a  dollar  is  a  debt. 
^f"A  dollar  has  never  been  a  debt.  It  is  not 
made  for  redemption,  but  is  made  to  be  a  re- 
deemer." It  has  been  well  said,  "If  the  paper 
dollar  is  treated  as  a  debt,  then  also  the  gold  dol- 
lar must  be  treated  as  a  debt,  else  the  one  dollar 
is  not  at  a  parity  of  function  with  the  other  dol- 
lars, then  one  has  a  quality  that  the  other  does 


1 20  The  Money  Power 

not  possess,  and  the  two  dollars  are  not  treated 
on  equal  terms. 

<JThen  there  is  no  sound  and  stable  money 
unless  every  unit  is  legally  equivalent  to  every 
other  unit. 

€|  A  perfect  money  unit  or  dollar  can  be  created 
only  by  an  act  of  sovereignty  impressing  upon  it 
the  great  law  of  a  legal  tender. 
If  Gold  bullion,  when  denied  the  right  of  coinage 
and  legal  tender,  will  be  mere  useless  property, 
unless  used  in  the  arts.  I  ask  the  people  of  the 
United  States  how  much  longer  will  they  allow 
themselves  to  be  fooled  and  impoverished  by  this 
money  power  making  them  believe  that  dollars 
are  debts,  redeemable  and  convertible  into  each 
other. 

€J  When  the  money  power  is  herein  spoken  of,  it 
means  the  European  monied  interests  as  led  by 
the  Bank  of  England,  the  Rothschilds  and  their 
American  agents,  August  Belmont  &  Co.,  J.  P. 
Morgan  &  Co.,  et  al.,  and  their  Hebrew  Asso- 
ciates in  the  United  States,  the  Clearing  House 
Association  of  New  York,  established  in  1853, 
and  the  American  Bankers'  Association,  an  or- 
ganization of  practically  every  bank  of  any  size 
in  the  United  States. 

<J  This  is  the  money  power  that  controls  the  cir- 
culating medium  and  money  system  of  this  coun- 
try, and  the  business  future  of  the  American 
people. 

C[This  money  power  dominates  the  United 
States  Treasury,  influences  the  appointment  of 
its  most  important  officials,  and  those  who  are 
efficient  rarely  fail  to  receive  more  lucrative  ap- 
pointments in  Banking  Corporations, 


The  Money  Power  1 2 1 

<}  Senator  John  T.  Morgan,  of  Alabama,  after 
many  years  of  honorable  service  in  the  United 
States  Senate,  made  the  following  statement: 
ff*  'Never  in  the  history  of  any  government  has 
such  treatment  of  laws  been  found  as  in  the  des- 
potism of  the  Secretaries  of  the  Treasury,  in 
conjunction  with  the  National  Banks  to  trample 
out  every  law  that  stood  in  the  way  of  their  pe- 
culiar and  pet  theories,  and  their  peculiar  mo- 
nopolistic advantage.  This  is  a  bold  declara- 
tion; I  will  make  it  good  against  all  coders.  I 
challenge  investigation  of  that  statement  upon 
the  law  and  practice  of  the  Government.  They 
pay  no  regard  to  the  statutes.  Construction  will 
do  anything  with  the  rights  of  any  man  who  will 
submit  to  it.  The  worst  tyrannies  that  have 
ever  been  in  this  world  were  the  results  of  false 
construction,  eating,  like  a  cancer,  from  point  to 
point  and  step  by  step,  sapping  nerve  after  nerve 
of  vitality,  until  it  finally  attacks  the  citadel  and 
destroys  the  victim.  Let  us  have  the  truth,  the 
honest  truth.  If  constructions  are  to  be  made,  let 
them  be  made  in  favor  of  the  people  and  not 
against  them;  in  favor  of  right  and  life  and  lib- 
erty, and  not  in  the  direction  of  tyranny." 
CJThe  New  York  Evening  Journal  of  Oct.  1, 
1912,  states: 

€|  "The  Treasury  of  the  United  States  is  run,  not 
for  the  farmers  and  the  other  workers  that  fill 
the  Treasury  with  gold,  but  for  the  banks  and 
the  other  blood-suckers  that  know  how  to  get 
what  they  want;  that  hire  a  Secretary  of  the 
Treasury  at  an  enormous  salary  at  the  end  of  his 
term  and  let  each  succeeding  Secretary  know 
that  he  can  be  rich  and  comfortable  for  life  if  he 
will  give  the  people's  money  to  the  banks  to  be 
used  in  bleeding  the  people." 


ANGLO-AMERICAN  MONEY  TRUST. 


T  has  been  plainly  shown  that  our 
money  system  was  derived  from 
the  Bank  of  England  scheme  of 
drawing  interest  from  borrowers 
by  issuing  to  them  Bank  credits, 
and  by  this  operation  charging  them 
interest  on  a  substitute  for  money.  This  process 
has  enriched  the  Banking  interest  and  the  fa- 
vored few  in  England,  and  impoverished  the 
working  and  producing  classes  of  all  Europe. 
If  Alexander  Hamilton,  in  sympathy  with  the 
English  government,  expressed  himself  as  fol- 
lows: "I  believe  the  British  government  forms 
the  best  model  the  world  ever  produced."  He 
also  said:  "The  rich  and  well-born  should  gov- 

M 

ern. 

CJAlso  in  sympathy  and  associated  with  the 
capitalistic  class  of  England,  he  co-operated 
with  England  in  her  preconceived  determination 
to  prevent  the  United  States  from  establishing 
an  independent  American  money  system.  To 
do  this  the  money  power  of  England  used  its  po- 
tential influence  in  every  conceivable  way  to  pre- 
vent the  people,  through  their  government,  from 
exercising  their  highest  act  of  sovereignty  to 
create  and  issue  full  legal  tender  money,  and 
thereby  achieve  their  financial  independence. 
In  1  766  Lord  Mansfield  stated  in  the  House  of 
Lords:  "Acts  of  Parliament  have  been  made  not 
only  without  a  doubt  of  their  legality  but  with 
universal  applause  the  great  object  of  which  has 


Gold  Basis  Banks  of  Issue  1 23 

been  ultimately  to  fix  the  trade  of  the  colonies  so 
as  to  center  in  the  bosom  of  that  country  from 
whence  they  took  their  origin. 
«fln  1763  the  British  Parliament  declared  all 
Colonial  acts  for  the  issue  of  paper  currency  to 
be  void. 

<j[  Alexander  Hamilton  believed  in  the  English 
system  of  a  strong  centralized  government  and 
a  Bank  of  Issue.  He  was  made  the  first  Secretary 
of  the  United  States  Treasury. 
<J  Recognizing  the  interest  that  England  had  in 
our  money  system,  and  the  influence  of  her 
money  lenders  at  this  time,  we  can  fully  realize 
the  tremendous  meaning  and  significance  of 
their  maxim. 

€J  "Let  us  control  the  money  of  a  country  and  we 
care  not  who  makes  its  laws." 
fjfThus  the  English  system  of  Indirect  Taxa- 
tion, Debt-Funding  Schemes,  Gold  Basis  Banks 
of  Issue,  the  corner-stones  upon  which  rest  the 
aristocracies  of  the  old  world,  were  transferred 
to  the  United  States. 

CJ  All  these  are  methods  through  which  royalty 
legalized  the  robbery  of  the  toiling  millions,  and 
it  makes  no  difference  whether  a  king  and  a  par- 
liament of  wealth,  or  a  President  of  the  United 
States  and  Congress,  selected  by  the  bankers  and 
financiers,  preside,  the  condition  of  the  masses 
will  be  the  same. 

CJThe  first  so-called  United  States  Bank  estab- 
lished by  Hamilton  was  simply  the  old  Bank  of 
England  scheme  to  exploit  the  people.  The  same 
system  was  carried  forward  to  the  second  so- 
called  Bank  of  the  United  States.  They  were 
simply  banking  corporations  trading  under  the 
name  of  this  great  republic.  Then,  under  the 


1 24  So-called  National  Banks 

fostering  care  of  John  Sherman,  of  the  Finance 
committee  of  the  Senate,  it  was  resurrected  in 
his  hydra-headed  so-called  National  Banks  of  Is- 
sue of  the  United  States.  It  is  proven  from  the 
records  of  Congress  and  the  testimony  of  unim- 
peachable witnesses  that  the  moral  turpitude 
and  perfidy  of  John  Sherman  in  passing  laws  to 
establish  the  present  European  money  system  in 
the  United  States  have  no  equal  in  the  financial 
history  of  the  world. 

<JThe  machinery  of  both  Houses  of  Congress 
was  put  in  working  order  and  a  sufficient  num- 
ber of  their  members  fixed  to  rush  through  in  ten 
days  this  banker's  and  money-lender's  bill.  While 
the  people  were  engaged  in  a  great  civil  war  this 
financial  curse  was  inflicted  upon  the  United 
States.  It  transferred  the  control  of  the  money 
system  of  the  United  States  to  banking  corpora- 
tions authorizing  them  to  use  the  function  of  sov- 
ereignty and  issue  their  promises  to  pay,  or 
credit  currency,  as  a  substitute  for  real  money. 
<I  As  soon  as  this  act  became  a  law  the  money 
power  proceeded  to  build  up  a  monopoly  to  con- 
trol the  money  system  of  this  country.  The  all- 
powerful  influence  back  of  this  act  of  Congress 
forced  the  government  to  issue  interest-bearing 
securities,  as  a  circulating  medium,  later  to  be 
exchanged  for  interest-bearing  United  States 
Bonds.  This  destroyed  the  circulating  medium 
of  exchange,  upon  which  all  business  and  the  de- 
velopment of  the  country  depended,  at  the  very 
time  it  was  most  needed. 

if  This  consummate  scheme  worked  automati- 
cally as  intended.  These  government  securities 
bearing  interest  were  thereby  destroyed  as  a  per- 
manent circulating  medium,  being  themselves 


American  Bankers  Association          1 25 

an  investment  for  money  and  not  being  a  legal 
tender  for  debts.  When  the  United  States  inter- 
est-bearing bonds  were  later  offered  in  exchange 
for  these  interest-bearing  securities,  used  as  cur- 
rency, the  banks  began  to  take  them  out  of  cir- 
culation, thereby  contracting  the  currency,  de- 
pressing the  price  of  the  bonds  and  buying  them 
in  at  the  lowest  possible  price.  It  should  be 
borne  in  mind  that,  under  this  act,  the  banks 
could  deposit  these  bonds  in  the  United  States 
Treasury,  draw  interest  upon  them,  and  issue 
ninety  per  cent,  of  their  par  value  in  their  bank 
notes  as  money.  It  was  not  only  a  most  profit- 
able swindle  of  the  government  and  people  of 
the  United  States  but,  at  the  same  time,  accom- 
plished their  fixed  and  far-reaching  purpose  of 
issuing  their  notes  as  currency  and  controlling 
the  money  system  of  the  United  States  in  their 
own  interest. 

CJThe  next  attack  is  made  on  the  non-legal 
tender,  * 'greenbacks,"  and  silver,  in  order  to  de- 
stroy this  currency  issued  by  the  government 
and  make  way  for  their  bank  notes,  and  still 
further,  build  up  their  money  monopoly. 
CJThe  loss,  misery,  and  poverty  inflicted  on  the 
people  of  the  United  States  by  Specie  Redemp- 
tion, Gold  Payments,  and  the  demonetization  of 
silver,  in  order  to  accomplish  this  monopoly  over 
the  money  system  of  this  country,  have  been  de- 
scribed. 

<}  Can  any  sane  man  fail  to  see  the  motive,  pur- 
pose and  plan  deliberately  worked  out  by  this 
money  power  to  control  the  money  system  of  the 
United  States?  If  so,  I  would  call  his  atten- 
tion to  the  circular  sent  out  by  the  American 
Bankers'  Association  that  brought  on  the  Panic 


1 26  Asset  Currency  Bill 

of  1893,  and  the  influence,  brought  to  bear  to 
stop  the  government  from  issuing  any  more  U.  S. 
Treasury  notes,  then  the  act  of  Congress,  es- 
tablishing the  so-called  Gold  Standard  in  1  900, 
which  they,  no  doubt,  thought  perpetuated 
banks  of  issue  as  the  permanent  money  system  of 
the  United  States.  The  only  obstacle  they  now 
wish  to  remove  is  the  limitation  put  upon  their 
bank-note  circulation  by  restricting  the  issue  of 
their  notes  to  Government  Bonds.  They  realize 
if  the  government  pays  these  bonds  it  cuts  from 
under  them  the  very  foundation  of  their  exist- 
ence. In  recent  years  they  have  forced  additional 
bond  issues  as  a  means  of  preservation.  This 
being  the  case,  and  realizing  that  the  people 
would  not  stand  for  bond  issues  of  any  size  in 
time  of  peace,  they  therefore  brought  forward 
their  carefully  laid  plan  of  substituting  their  mis- 
cellaneous securities  as  a  basis  for  issuing  bank 
notes  in  place  of  Government  Bonds.  After  the 
American  Bankers'  Association  held  meetings, 
covering  the  period  of  several  years,  considering 
the  matter,  they  presented  their  conclusions  and 
what  they  wanted  in  a  currency  plan,  de- 
scribed as  an  Asset  Currency  Bill.  This 
would  enable  them  to  draw  interest  from 
the  people  on  the  asets  of  the  bank  while 
held  as  security  by  the  United  States 
Treasury  that  would  authorize  them  to  issue 
their  bank  notes  as  money  to  be  loaned  to 
the  people.  Being  unable  to  get  favorable  action 
from  Congress  on  this  bill  in  1  906,  they  waited 
until  1907,  when  another  bill  of  the  same  kind 
was  presented  by  Senator  Aldrich  after  many 
conferences  with  J.  P.  Morgan  &  Co.,  et  al.  This 
was  also  an  Asset  Currency  Bill  and,  among 


Aldrich-Vreeland  Emergency  Law       127 

other  things,  provided  that  railroad  bonds  should 
be  accepted  as  the  basis  of  national  bank  note 
issues.  J.  P.  Morgan,  the  great  manufacturer  of 
debts  on  the  railroads  of  this  country,  was  pres- 
ent in  the  gallery  of  the  United  States  Senate 
when  Nelson  W.  Aldrich,  Chairman  of  the  Fi- 
nance Committee,  advocated  the  passage  of  this 
Bill. 

<|This  Bill  was  violently  opposed  by  the  leader 
of  the  Republican  Progressives  in  the  Senate, 
and  Aldrich,  seeing  it  would  be  defeated,  re- 
sorted to  an  infamous  legislative  trick  worthy  of 
John  Sherman.  With  the  co-operation  of  Vree- 
land,  of  the  House,  this  measure  was  put  through 
both  Houses  of  Congress  in  the  last  two  days  of 
the  session.  The  Aldrich-Vreeland  Emergency 
Currency  Law,  which  creates  National  Banks  of 
Issue  in  blocks  of  ten,  and  gives  them  authority 
to  issue  their  notes  on  the  assets  of  the  banks 
from  bonds  down  to  one  name  paper,  accord- 
ing to  the  ruling  of  the  Secretary  of  the  Treas- 
ury. This  law  should  be  watched  by  the  people, 
for  a  simple  amendment,  extending  its  time  and 
relieving  the  notes  issued  thereunder  from  the 
emergency  tax,  would  practically  take  the  place 
of  the  Money  Trust  Bill  now  pending  in 
Congress. 

€|The  law  reads  "That  this  act  shall  expire  by 
limitation  on  the  thirtieth  day  of  June,  1914." 
<|This  act  puts  the  banks  in  a  position  to  get 
$500,000,000  from  the  United  States  Treasury 
in  an  emergency,  and  does  not  provide  that  the 
borrower  can  get  one  dollar.  It  is  shown  that  the 
banks  can  create  the  emergency  whenever  they 
want  it. 


1  28  A  Money  Trust  Bill 


banks  are  put  in  a  panic-proof  condition 
and  the  people  left  defenseless. 
tJThe  money  power  framed  this  law  and  ap- 
pointed "The  National  Monetary  Commission" 
that  have  favorably  reported  to  Congress  a  Bill 
which  should  be  correctly  described  as  "The 
Anglo-American  Money  Trust  Combination." 
f§lt  is  masquerading  under  the  misleading  title 
of  the  "Reserve  Association  of  the  United 
States,"  and  is  now  pending  in  Congress.  What 
do  we  find  as  a  result  of  the  operation  of  this 
Bank  of  England  money  scheme  transplanted  in 
the  United  States? 

€J  It  forced  upon  the  tax-payers  of  this  country, 
absolutely  without  justification,  over  $2,000,- 
000,000  of  bonds,  principally  for  the  benefit  of 
European  bond  dealers  and  American  Bankers. 
CJThis  has  cost  the  people  of  the  United  States, 
in  hard-earned  cash,  over  $3,500,000,000,  in- 
cluding interest.  It  has  been  the  direct  cause  of 
four  disastrous  panics,  each  inflicting  upon  the 
people  the  loss  of  untold  millions.  It  has  en- 
abled International  and  American  Bankers  and 
Bond  and  Stock  Jobbers  to  manufacture  $70,- 
000,000,000  of  paper  tokens  of  wealth  upon  the 
industrial  and  manufacturing  resources  of  the 
United  States,  that  they  propose  to  make  the 
people  take  care  of  by  paying  the  interest  and 
dividends. 

<|It  has  impoverished  and  made  debtors  of 
about  90  per  cent  of  the  people.  It  has  filled  the 
large  cities  with  non-producers,  gamblers  and 
parasites.  It  has  lowered  our  moral  standard 
and  destroyed  the  reputation  and  character  of 
American  Manhood. 


LOANING  OF  BANK  CREDITS  AND  USE 

OF  CLEARING  HOUSE  CERTIFICATES 

AS  A  SUBSTITUTE  FOR  MONEY, 

HE  result  of  all  this  legislation  in  the 
interest  of  banks  has  reduced  the 
supply  of  real  money  to  such  a  small 
stock,  and  most  of  it  out  of  circula- 
tion and  held  and  controlled  by  the 
banking  institutions  that  we  could 
not  do  business  a  single  day  if  the  banks  did  not 
add  to  the  money  stock  by  every  ingenuity,  trick 
and  device  whereby  the  banker  is  enabled  to 
keep  every  actual  dollar  drawing  interest  in  sev- 
eral places  at  the  same  time.  By  this  process  the 
banks,  to  all  practical  purposes,  are  counterfeit- 
ing money,  by  lending  what  is  called  the  banks' 
credit  as  a  substitute  for  money.  The  counter- 
feiter gives  no  valuable  consideration  for  the 
money  he  circulates.  The  banker  gives  no  val- 
uable consideration  for  this  credit  he  furnishes 
the  borrower;  yet  the  borrower  has  to  pay  dol- 
lars for  that  which  cost  the  banker  nothing.  By 
the  use  of  these  credit  devices  and  the  working 
of  the  "Clearing  House  System  among  Banks" 
the  transactions  that  involve  the  handling  of  cash 
are  relatively  small. 

<JA  practical  illustration  will  make  plain  the 
operation.  The  owner  of  stocks,  bonds  or  any 
kind  of  security  borrows  $5,000  from  a  bank 
and  leaves  his  security  with  the  bank.  The  bank 
draws  interest  on  the  $5,000  without  the 


130      Bank  Credits  and  Clearing  House 

borrower  ever  seeing  any  kind  of  a  dollar.  He 
simply  receives  authority  to  draw  upon  the 
bank's  credit  to  the  extent  of  $5,000,  which  he 
may  do  in  checks  in  payment  for  property  or 
more  stocks  and  bonds. 

<|The  bank  generally  pays  these  checks  by  mak- 
ing a  few  figures  in  its  books — deducting  from 
the  credit  of  the  borrower  and  adding  to  the 
credit  of  those  who  present  the  checks. 
€j[  Yet  the  bonds  or  security  left  by  the  borrower 
have  become  an  asset  of  the  bank,  and  the  bank 
proceeds  to  lend  another  borrower  $5,000  upon 
the  basis  of  the  first  borrower's  bonds  or 
security. 

<JBy  this  operation  a  small  amount  of  actual 
cash  may  be  pyramided  into  a  great  many  loans 
drawing  interest  upon  the  same  small  amount  of 
cash. 

<JThe  same  applies  to  National  Bank  Notes. 
€J  A  million  dollars  of  them  invested  in  Govern- 
ment bonds  used  as  a  basis  of  bank  circulation 
draw  interest  from  the  Government  and  from 
other  borrowers  at  the  same  time. 
<J  Thus  for  interest-drawing  purposes  the  million 
dollars  is  not  one  million  dollars,  but  may  be  ten 
or  fifteen  million. 

tj  It  may  occur  to  the  mind  of  the  reader  that  a 
borrower  does  not  always  leave  the  amount 
placed  to  his  credit  with  the  bank,  but  would 
withdraw  it  and  put  it  in  another  bank  to  his 
credit.  This  is  rarely  done,  as  the  rules  of  most 
banks  is  to  discount  only  for  their  depositors  or 
to  open  an  account  with  the  borrower.  Yet  if 
the  cash  was  withdrawn  and  put  in  another  bank 
it  would  make  but  little  difference  in  the  aver- 
aging up  between  the  banks  by  the  invention  of 


Substitutes  for  Money  1 3 1 

the  Banker's  Friend,  the  ''Clearing  House  Asso- 
ciation," that  most  wonderful  invention  of  the 
banking  mind,  to  economize  cash — inflate  bank 
credits,  as  a  substitute,  thus  drawing  interest  on 
dollars  that  do  not  exist,  thus  manufacturing  in- 
terest-bearing debts  on  the  people. 

To  show  the  marvelous  workings  of  this 
Clearing  House  Association  machinery — not 
patented,  not  incorporated,  entirely  outside  of 
the  law,  never  contemplated  as  a  part  of  our 
money  system,  its  proceedings  not  subject  to 
judicial  review.  In  1911  the  140  Clearing 
House  Associations'  transactions  amounted  to 
$92,420, 1  20,092.  In  short,  this  Bankers'  Inven- 
tion or  Scheme  enabled  the  Banks  in  the  United 
States,  by  having  their  checks  exchanged  and 
cancelled,  thereby  reducing  the  amount  of  cash 
used  to  the  basis  of  paying  in  money  only  $4.78 
on  $  1 00,000  of  checks  on  the  bank. 
fj  The  whole  system  enabled  the  banks  to  inflate 
the  currency  system  by  loaning  their  credit  as  a 
substitute  for  money,  making  every  actual  dollar 
the  basis  of  earning  interest  on  five  times  the 
amount,  thereby  pyramiding  debts  on  a  narrow 
real  money  basis.  The  inevitable  result  in  any 
attempt  to  collect  these  debts  is  a  panic.  I  desire 
to  call  attention  to  the  advantage  that  the  bank 
has  over  the  borrower  and  the  public  generally 
in  this  transaction.  The  bank  loans  the  borrow- 
er its  credit,  a  thing  of  no  material  value,  yet  the 
borrower  has  to  pay  off  this  credit  with  actual 
money. 

fJThis  makes  it  an  unjustifiable  exaction  against 
the  borrower  that  should  not  be  allowed  in  itself, 
and  for  another  serious  reason  that  it  affects 
most  injuriously  the  general  public,  for  the  rea- 


1 32  An  Elastic  Currency 

son  that  when  the  banks  desire  to  increase  their 
money  reserves,  or  cash  holdings,  they  call  for 
cash  payments  of  these  inflated  bank  credits 
when  it  is  most  difficult  for  the  borrower  to  get 
hold  of  money;  the  result  being  he  has  to  sacri- 
fice his  property  in  a  contracted  money  market 
at  less  than  its  true  value,  and,  if  the  banks 
become  apprehensive  as  a  result  of  a  falling  mar- 
ket, caused  by  their  own  action,  and  make  addi- 
tional demands  upon  their  borrowers  for  money 
and  curtail  their  discounts,  a  depression,  or 
panic,  is  the  result,  which  becomes  a  harvest  to 
the  bankers,  for,  having  the  use  of  money,  they 
can  buy  the  best  securities  forced  on  the  market 
for  a  mere  song,  and  sell  them,  when  prosperity 
returns,  at  the  top  of  the  market.  It  is  here 
clearly  shown  that  it  is  the  inflation  and  sale  of 
these  bank  credits  that  cause  panics,  and  the 
great  losses  and  suffering  inflicted  upon  the 
people  thereby. 

CJThis  plan  was  put  in  operation  by  the  banks 
through  the  circular  issued  by  the  American 
Banking  Association  directing  them  to  call  in 
half  their  loans  and  retire  one-third  of  their  bank 
note  circulation.  The  panic  of  1 893  was  the 
direct  result  of  this  action  of  the  banks,  by  a 
well-thought-out  and  deliberate  scheme  to 
destroy  the  business  and  property  of  the  people. 
The  panic  of  1 893  was  one  of  the  worst  in  point 
of  loss  and  duration  ever  known  in  this  country. 
CJThe  same  acts  will  cause  a  panic  any  day  in 
the  year.  Yet  what  is  everybody's  business 
seems  to  be  nobody's  business — and  these  banks 
hold  the  lives,  happiness  and  prosperity  of  the 
people  entirely  in  their  control. 


Or  India  Rubber  Money  1 33 

Sit  is  conclusively  shown  in  this  pamphlet  that 
e  object  sought  by  the  banking  interests  was  to 
reduce  the  supply  of  real  money  issued  by  the 
Government  to  the  minimum,  so  that  the  people, 
in  order  to  do  business,  would  have  to  use  bank 
credits  as  a  substitute  for  money.  Thus  a  loan 
to  the  borrower  may  have  no  real  money  back  of 
it.  Simply  a  bank  credit,  but  it  at  once  becomes 
a  money  demand  against  the  borrower,  and 
every  loan  collected  by  the  bank  withdraws  from 
circulation  so  much  money.  This  deliberate 
plan  to  exploit  the  people  has  been  systematic- 
ally worked  out  by  those  who  have  established 
the  present  banking  system  whereby  the  people 
have  been  put  absolutely  at  their  mercy.  Under 
the  operation  of  their  well-perfected  plan,  it  is 
only  necessary  for  the  banks  to  call  in  a  small 
percentage  of  their  loans  amounting  to  the  fab- 
ulous sum  of  $1  3,046,000,000  and  withdraw  at 
the  same  time  one-third  of  their  india-rubber 
banknote  circulation,  amounting  to  $711 ,099,- 
938,  and  it  would  produce  a  panic  and  contrac- 
tion of  the  currency  sufficient  to  destroy  business 
prosperity  of  the  country,  relegate  millions  of 
people  into  enforced  idleness  and  create  wide- 
spread ruin  and  poverty.  It  should  be  borne  in 
mind  by  the  people  that  the  large  bank- 
ing institutions  have  protected  themselves 
against  losses  from  these  artificial  panics, 
all  of  which  are  the  result  of  the  vicious 
system  they  have  put  into  operation,  as 
they  are  enabled  to  take  advantage  of 
panics  with  tremendous  profit  to  themselves.  It 
will  be  seen  that,  while  the  people  are  left  in  a 
defenseless  position,  being  unable  to  get  hold  of 
money  or  discount  their  paper  at  the  bank,  the 


\  34        Withdrawn  When  Most  Needed 

banks,  through  the  operation  of  the  Clearing 
House  Association,  find  absolute  protection,  as 
the  organization  constructed  by  themselves, 
entirely  for  their  own  benefit,  in  plain  violation 
of  the  law,  usurping  the  function  of  the  highest 
act  of  sovereignty,  issuing  that  which  is  prac- 
tically money  in  their  Clearing  House  certifi- 
cates. I  would  ask  the  people  to  realize  that, 
when  they  are  unable  to  get  hold  of  money  or 
any  substitute  to  protect  themselves  against 
ruin,  this  central  power  of  the  banks  gives  them 
the  use  of  a  far  more  potent  substitute,  for  they 
can  use  these  Clearing  House  certificates  to  settle 
their  net  balances  at  the  Clearing  House,  where 
$4.78  takes  care  of  $100,000  of  checks  drawn 
by  the  people  on  the  banks.  In  the  panic  of  1  907 
the  New  York  Clearing  House  alone  issued 
$101,000,000  of  these  Clearing  House  certifi- 
cates for  the  use  and  protection  of  the  New  York 
banks,  for  the  use  of  which  the  banks  only  put 
up  miscellaneous  securities. 


THE    AMERICAN    BANKERS    ASSOCIA- 
TION. 

Panic  Circular. 

N  order  to  show  that  the  people  were 
deceived  in  the  Presidential  Cam- 
paign of  1892  and  that  the  money 
power  was  the  controlling  force 
back  of  this  campaign  and  that  their 
purpose  was  to  stop  the  Govern- 
ment from  adding  to  the  currency  system  by  the 
coining,  or  use  of  any  more  silver  as  currency, 
and  by  doing  this  increase  the  hold  of  the  money 
power  and  banking  interest  over  the  money  sys- 
tem of  the  United  States,  in  the  Campaign  of 
1 892  the  people  were  kept  excited  and  their  at- 
tention centered  on  the  Tariff,  the  Nominal  Issue, 
while  the  real  issue  was  being  kept  from  them. 
They  talked  Tariff  while  the  real  issue  was 
money.  A  valuable  witness  is  at  hand  from  the 
inner  money  circle  to  prove  that  this  was  the  case 
in  1  902.  Mr.  Solomon,  a  partner  of  Speyer  & 
Co.,  International  Bankers,  made  the  following 
statement  in  the  "Forum"  for  July,  1895,  en- 
titled * 'Sound  Currency  and  the  Dominant 
Issue." 

It  was  well  understood  that  a  reform  of  the 
tariff  was  to  be  the  nominal  issue  of  the  cam- 
paign of  1892,  and  that  all  the  changes  were 
to  be  rung  upon  that  theme,  but  enthusiasm 
for  a  reform  of  the  tariff  would  not  have  pro- 
duced for  the  anti-snapper  movement  the 


136  Panic  Circular,  1893 

sinews  of  war.  What  did  produce  them  was 
the  conviction  that  the  triumph  of  the  Demo- 
cratic party,  with  Mr.  Cleveland  at  its  head, 
would  mean  a  repeal  of  the  purchasing  clause 
of  the  Sherman  Act.  A  large  number  of  the 
men  who  joined  actively  in  the  work  of  or- 
ganization, though  also  tariff  reformers,  could 
not  have  afforded  to  make  the  numerous  self- 
sacrifices  necessary  to  taking  an  active  part  in 
a  canvass  on  any  but  such  a  vital  issue  as  that 
of  the  maintenance  of  the  integrity  of  the  cur- 
rency. 

€J  This  article  was  written  by  Mr.  Solomon,  who 
was  in  a  position  to  know  the  facts,  and  he  put 
himself  on  record  as  above,  three  years  after  the 
people  thought  they  had  elected  Cleveland  upon 
the  Tariff  Issue.  In  this  connection,  I  desire  to 
call  the  attention  of  the  people  of  this  country 
to  what  is  known  as  the  American  Bankers' 
Association.  This  Asociation  is  made  up  of 
local  clearing  house  associations  numbering  1 40, 
throughout  the  United  States.  In  other  words, 
the  American  Bankers'  Association  is  a  com- 
bination of  the  various  Local  Clearing  House 
Associations  throughout  the  United  States,  com- 
posed of  the  individual  banks  in  the  different 
communities  throughout  the  United  States. 
t|The  Clearing  House  Associations  are  auto- 
cratic bodies  organized  upon  the  plan  of  the 
Clearing  House  Association  of  New  York, 
which,  in  fact,  is  the  parent  organization,  was 
formed  in  1853,  and  is  one  of  the  im- 
portant factors  of  the  money  power.  It  is  a 
voluntary  organization,  has  no  charter  from 
the  state,  is  not  amenable  to  legislative  or 


American  Bankers  Association         137 

judicial  control.  It  absolutely  controls  its 
membership,  which  at  present  embraces  every 
large  bank  and  trust  company  in  the  City 
of  New  York.  After  a  Bank  has  once  become  a 
member  of  any  of  these  "Clearing  House  Asso- 
ciations" and  uses  its  machinery  to  clear  for 
them,  the  fate  of  such  a  bank  is  absolutely  at  the 
mercy  of  the  Association,  for  the  reason  that,  if 
the  Association  declines  or  stops  clearing  for 
them,  a  run  is  immediately  made  upon  the  bank 
and  it  has  to  close  its  doors.  Bearing  in  mind  the 
power  of  the  American  Bankers  Association, 
which  through  its  Clearing  House  Association 
membership  reaches  every  Bank  of  any  im- 
portance in  the  United  States,  it  is  obvious  that 
none  of  them  would  be  willing  to  antagonize  its 
influence  and  power. 

flit  is  important  to  bear  in  mind  that,  at  the 
time  of  Cleveland's  Inauguration,  business  con- 
ditions throughout  the  United  States  were  in  a 
prosperous  state,  crops  were  good  and  the  mer- 
cantile agencies  reported  conditions  'Very  satis- 
factory and  unusually  strong."  At  this  time  the 
Government  was  purchasing  and  putting  into 
circulation  4,500,000  ounces  of  silver  a  month, 
represented  by  United  States  silver  certificates. 
This  the  Banks  determined  to  stop,  and,  as  soon 
as  Cleveland  had  taken  the  oath  of  office  as 
President  of  the  United  States,  the  "American 
Bankers  Association,"  realizing  that  there  was  a 
large  majority  in  Congress  against  the  repeal  of 
this  act  whereby  the  Government  was  issuing 
additional  currency,  determined  to  force  its 
repeal  by  creating  a  panic  in  order  to  do  so.  Just 
twelve  days  after  Cleveland  was  sworn  into 
office,  on  March  12,  1893,  the  American  Bank- 


138  Panic  of  1893 

ers  Association,  representing  the  Incorporated 
National  Banks  of  the  United  States,  through 
their  all-powerful  influence  and  control  of  the 
currency  of  this  country,  deliberately  planned  to 
destroy  the  prosperity  and  business  welfare  of 
over  80,000,000  people  in  order  to  increase  their 
stranglehold  on  the  Monetary  System  of  the 
United  States,  their  plan  being  to  drive  the 
people  into  misery  and  poverty,  hiding  their  in- 
tentions by  loudly  proclaiming  that  it  was  due  to 
the  Government  adding  to  the  currency  by  is- 
suing silver  certificates,  charging  that  the  panic 
was  brought  on  by  the  Government  using  silver 
bullion  and  issuing  silver  certificates  to  increase 
the  currency.  Fortunately,  the  Panic  Circular 
sent  out  on  the  1 2th  of  March,  1 893,  by  this  or- 
ganization, the  American  Bankers  Association, 
is  at  hand  and  can  be  correctly  designated  as 
the  panic  circular  of  the  organized  money  power 
of  the  United  States,  as  it  was  the  immediate 
and  only  cause  of  the  panic  of  1 893.  It  reads  as 
follows: 

Dear  Sir: — The  interests  of  national  bank- 
ers require  immediate  financial  legislation  by 
.  Congress.  Silver,  silver  certificates  and  treas- 
ury notes  must  be  retired  and  the  national 
bank  notes,  upon  a  gold  basis,  made  the  only 
money.  This  requires  the  authorization  of 
$500,000,000  to  $1,000,000,000  of  new 
bonds  as  a  basis  of  circulation.  You  will  at 
once  retire  one-third  of  your  circulation  and 
call  in  one-half  of  your  loans.  Be  careful  to 
make  a  money  stringency  felt  among  your 
patrons,  especially  among  influential  business 
men.  Advocate  an  extra  session  of  Congress 


American  Bankers  Association         1 39 

for  the  repeal  of  the  purchase  clause  of  the 
Sherman  law;  and  act  with  other  banks  of 
your  city  in  securing  a  large  petition  to  Con- 
gress for  its  unconditional  repeal,  as  per  ac- 
companying form.  Use  personal  influence 
with  congressmen;  and  particularly,  let  your 
wishes  be  known  to  your  senators.  The 
future  life  of  national  banks  as  fixed  and  safe 
investments  depends  upon  immediate  action, 
as  there  is  an  increasing  sentiment  in  favor  of 
governmental  legal  tender  notes  and  silver 
coinage. 

CJThe  testimony  of  Cleveland  verifies  the  condi- 
tion of  prosperity  at  this  time. 

Our  unfortunate  financial  plight  is  not  the 
result  of  untoward  events,  or  of  conditions 
related  to  our  national  resources;  nor  is  it 
traceable  to  any  of  the  afflictions  which  fre- 
quently check  national  growth  and  pros- 
perity. With  plenteous  crops,  with  abundant 
promise  of  remunerative  production  and  man- 
ufacture, with  unusual  invitation  to  safe  in- 
vestment, and  with  satisfactory  assurance  of 
business  enterprise,  suddenly  financial  dis- 
trust and  fear  have  sprung  up  on  every  side. 

CJThat  of  Senator  Hill  of  New  York  as  to  the 
action  of  the  Bankers  in  following  the  directions 
given  them  by  the  American  Bankers  Associa- 
tion. 

€|  Senator  Hill,  in  a  speech  in  the  Senate,  on 
August  25,  1893,  said: 

They  (the  bankers)  inaugurated  the  policy 
of  refusing  loans  to  the  people,  even  upon  the 
best  of  security,  and  attempted  in  every  way 


140  Panic  of  1893 

to  spread  disaster  throughout  the  land.  These 
disturbers — these  promoters  of  the  public 
peril — represent  largely  the  creditor  class,  the 
men  who  desire  to  appreciate  the  gold  dollar 
in  order  to  subserve  their  own  selfish  interests ; 
men  who  revel  in  hard  times;  men  who  drive 
harsh  bargains  with  their  fellow-men  regard- 
less of  financial  distress,  and  men  wholly  un- 
familiar with  the  principles  of  monetary 
science. 

Carlisle  Decision  Turned  Dollars  into  Debts. 

<|From  1 862  to  1 893  the  control  of  the  govern- 
ment was  in  the  hands  of  the  Republican  party. 
During  all  this  time  all  legislation  on  money  had 
been  dominated  by  the  banking  interest,  but  at 
this  time  the  money  interest  realized  that  there 
was  a  large  majority  in  Congress  which  was 
opposed  to  discontinuing  entirely  the  further  use 
of  silver,  by  the  government,  as  money;  so  they 
determined  to  make  the  Democratic  party  their 
scapegoat  and  tool  in  order  to  put  over  the  next 
financial  conspiracy  upon  the  people  of  the 
United  States  and  still  further  strengthen  the 
hold  and  control  of  banks  of  issue  over  the  cir- 
culating medium  of  the  country.  There  never 
was  a  more  comprehensive  plan  put  in  operation 
by  the  banking  associations  to  coerce  Congress 
to  pass  this  bill.  The  writer  was  in  contact  with 
senators  and  the  representatives  of  the  people  in 
Washington;  appeals  were  being  made  to  them 
from  their  constituents  all  over  the  United  States 
to  withdraw  their  objections  to  the  passage  of 
this  bill,  as  their  banks  had  notified  them  that 
they  could  not  give  them  banking  accommoda- 


Dollars  Turned  into  Debts  141 

tions  unless  this  bill  was  passed.  So  great  was 
the  pressure  upon  a  certain  senator  whom  I  knew 
intimately,  and  who  so  clearly  understood  the 
fraud  that  was  about  to  be  perpetrated  upon  the 
people,  that  he  said:  "It  was  the  greatest  trial  of 
my  life  to  refuse  to  comply  with  their  request, 
yet  I  would  have  lost  my  self -respect  and  would 
have  surrendered  my  honest  convictions  upon  a 
question  I  knew  would  be  of  greatest  injury  to 
the  people."  Holding  these  convictions,  he 
tendered  his  resignation  to  the  legislature  of  his 
state,  which  was  declined. 

If  In  this  fight  for  the  unconditional  repeal  of  the 
silver  act  the  organized  banking  interests  made  a 
direct  attack  on  the  silver  and  silver  certificates 
in  order  to  discredit  them,  the  object  of  the  bank- 
ers being  to  stop  any  further  addition  of  money 
issued  by  the  government  in  order  that  banks  of 
issue  might  substitute  their  notes  and  strengthen 
their  monoply  over  the  money  system  of  the 
United  States.  Space  will  not  permit  me  to  de- 
scribe the  loss  and  suffering  brought  upon  the 
people,  which  covered  a  period  of  about  six 
years. 

€|  I  will  now  come  to  the  next  step  taken  by  this 
association  of  the  banking  interests  to  absolutely 
discredit  and  convert  into  debts,  $350,000,000 
of  money,  that  had  already  been  issued  by  the 
government.  In  order  to  do  this  I  would  call 
attention  to  the  law  of  1890,  which  provides, 
Section  1 ,  "That  the  Secretary  of  the  Treasury 
is  hereby  directed  to  purchase,  from  time  to  time, 
silver  bullion  to  the  aggregate  amount  of  4,500,- 
000  ounces,  at  the  market  price  thereof  *  *  * 
and  to  issue,  in  payment  for  such  purchases  of 
silver  bullion,  Treasury  notes  of  the  United 
States." 


1 42     To  Establish  Gold  Standard  Fraud 

<J  Section  2.  "That  the  Treasury  notes  issued  in 
accordance  with  the  provisions  of  this  act  shall 
be  redeemable  on  demand,  in  coin,  at  the  Treas- 
ury of  the  United  States,  and  when  so  redeemed 
may  be  reissued." 

CJ  After  forcing  through  Congress  the  act  stop- 
ping the  coinage  of  silver,  they  put  into  oper- 
ation what  has  been  aptly  termed  "the  endless 
chain  process." 

if  John  G.  Carlisle,  who  had  been  speaker  of  the 
House  of  Representatives  and  a  life-long  op- 
ponent of  the  so-called  gold  standard,  had  stated 
(I  quote  him)  :  '* According  to  my  views  of  the 
subject,  the  conspiracy  which  seems  to  have 
been  formed  here  and  in  Europe  to  destroy  by 
legislation  and  otherwise  from  three-sevenths  to 
one-half  the  metallic  money  of  the  world  is  the 
most  gigantic  crime  of  this  or  any  other  age. 
The  consummation  of  such  a  scheme  would  ulti- 
mately entail  more  misery  upon  the  human  race 
than  all  the  wars,  pestilences  and  famines  that 
ever  occurred  in  the  history  of  the  world." 
<J  Cleveland  appointed  Carlisle  Secretary  of  the 
Treasury,  and  the  administration,  through  in- 
fluence brought  to  bear  by  the  money  interest, 
determined  to  increase  the  public  debt  by  the 
issue  of  bonds,  and  simultaneously  to  discredit 
and  turn  into  debts  $350,000,000  of  United 
States  Treasury  notes  and  silver  certificates,  and 
use  them  to  force  a  bond  issue  for  the  benefit  of 
the  banks  as  a  basis  for  the  increased  issue  of 
national  bank  notes.  The  writer  has  in  his  pos- 
session conclusive  evidence  of  the  following 
statement:  Although  the  law  provided  that 
Treasury  notes  should  be  redeemed  in  coin  at 
the  discretion  of  the  Secretary  of  the  Treasury, 


Dollars  Turned  into  Debts  1 43 

the  whole  object  of  the  law  being  that  the  Secre- 
tary should  use  the  option  in  the  interest  of  the 
people  and  redeem  the  Treasury  notes  in  either 
gold  or  silver,  using  that  which  was  most  con- 
venient at  the  time,  the  Bank  of  France  with- 
out exception  has  so  exercised  this  option.  Pres- 
ident Cleveland  used  his  influence  over  Carlisle 
to  get  him  to  construe  the  law  so  that  he  should 
redeem  these  United  States  Treasury  notes 
in  gold.  Carlisle  was  an  able  lawyer  and 
familiar  with  all  the  statutes  bearing  on  the 
subject  of  money,  was  also  aware  of  the 
motives  of  those  who  were  demanding  such  an 
illegal  construction  of  this  law;  he  was  so  much 
exercised  and  concerned  in  the  importance  of 
such  action  that  he  requested  two  United  States 
Senators,  his  closest  friends,  to  confer  with  him. 
One  was  Senator  Blackburn  of  Kentucky,  the 
other  Senator  Daniel  of  Virginia.  The  confer- 
ence was  held  at  Secretary  Carlisle's  K  Street 
residence,  he  having  an  appointment  to  see  Pres- 
ident Cleveland  at  the  White  House  that  night. 
These  two  senators  urged  Carlisle  to  adhere  to 
the  law  that  plainly  stated  that  the  Treasury 
notes  issued  in  payment  for  silver  bullion  should 
be  redeemed  in  coin,  either  silver  or  gold,  at  the 
option  of  the  Secretary  of  the  Treasury,  and  that 
for  him  to  do  otherwise  would  leave  the  United 
States  Treasury,  the  fiduciary  department  in- 
trusted with  the  people's  money,  at  the  mercy  of 
the  moneyed  interest.  Carlisle  left  the  house 
saying  that  he  would  not  relinquish  the  option 
to  redeem  these  Treasury  notes  as  provided  in 
the  law  and  allow  the  holder  of  these  notes  to 
demand  gold  in  payment  for  them,  which  would 
leave  the  Treasury  of  the  United  States  in  an 


1 44     To  Establish  Gold  Standard  Fraud 

absolutely  defenseless  condition,  and  enable  the 
holder  of  these  notes  to  raid  the  gold  reserve  of 
the  Treasury.  Senators  Blackburn  and  Daniel 
waited  for  him  to  return  from  his  interview  with 
Cleveland  at  the  White  House.  He  had  evident- 
ly had  a  long  and  trying  conference,  and  it  was 
midnight  before  he  returned.  He  met  his  friends, 
evidencing  the  greatest  humiliation,  and  said 
that  Cleveland  had  induced  him  against  his  own 
convictions  to  redeem  these  Treasury  notes  in 
gold.  Carlisle  looked  as  if  he  had  sold  his  birth- 
right. 

fJThe  unthinking  cannot  realize  the  far-reach- 
ing significance  of  this  decision.  It  was  the  first 
time  in  the  history  of  the  money  of  the  world 
that  a  dollar  was  decided  to  be  a  debt  redeem- 
able in  another  dollar.  The  direct  result  was 
the  conversion  of  350,000,000  Treasury  notes, 
or  dollars,  into  debts  redeemable  in  gold. 
It  opened  the  door  of  the  United  States  Treasury 
to  the  planned  attack  on  its  gold  reserve  and 
forced  an  issue  of  262,000,000  of  bonds  on  the 
taxpayers  in  a  time  of  profound  peace.  I  would 
impress  upon  the  voters  of  this  country  the  vital 
importance  to  them  of  this  action,  as  it  is  the 
absolutely  false  and  indefensible  premise  upon 
which  the  banking  interest  of  this  country  pro- 
poses to  build  their  so-called  National  Reserve 
Association  of  the  United  States,  viz.,  the  base- 
less and  fraudulent  assumption  that  it  is  neces- 
sary, in  order  to  maintain  the  equality,  or,  as  they 
term  it,  the  parity  of  our  dollars,  that  we  should 
construe  all  other  dollars  in  our  currency  system 
to  be  debts  redeemable  in  gold,  and,  in  order  to 
deceive  the  people,  they  have  created  a  gold  re- 
serve of  $  1  50,000,000  in  the  Treasury  to  be  used 


Dollars  Turned  into  Debts  1 45 

in  maintaining,  as  they  claim,  the  equality  or 
parity  of  our  dollars. 

CJ  Is  there  a  sane,  honest  man  who  will  contend 
for  one  moment  that  the  integrity  of  our  cur- 
rency system  and  the  equality,  parity  or  pur- 
chasing power  of  the  American  dollar  are  main- 
tained in  their  value  by  $150,0^0,000  of  gold 
(ostensibly  held  as  a  reserve,  yet  which  can  be 
raided  and  withdrawn  by  the  money  interest  at 
any  time),  and  not  by  the  $1  34,000,000,000  of 
national  wealth  and  the  services  of  94,000,000 
people  in  the  United  States  pledged  for  its  re- 
demption. 


PANIC  OF  1907. 

ARLY  in  1907  John  D.  Rockefeller 
predicted  the  "Panic  of  1  907,"  and 
other  Wall  Street  financiers  made 
the  same  statement,  a  little  later. 
Why  did  these  men  know  that  a 
panic  was  coming?  There  were  no 
visible  signs  in  the  natural  or  industrial  condi- 
tions of  the  country  to  indicate  it.  Large  crops 
and  great  business  actually  obtained  throughout 
the  country.  The  president  of  the  great  labor 
organizations  stated  before  the  Banking  and 
Currency  Committee  of  Congress  that  just 
before  this  panic  came  labor  was  universally 
employed,  and  at  better  wages  than  ever  before, 
and  that  many  were  adding  to  the  real  comforts 
of  life,  when,  without  sign  or  warning,  this  panic 
came  upon  them,  and  that  at  the  time  he  spoke 
two  million  workingmen  were  idle,  as  the  direct 
result  of  this  Money-Panic,  and  in  want  of  the 
necessities  of  life.  The  answer  is  easily  given; 
these  men  knew  a  panic  was  coming,  for  the  rea- 
son that  they  had  the  means  within  their  control 
to  create  it  and  had  determined  to  bring  it  upon 
the  country  with  the  most  profitable  results  to 
themselves.  In  addition  to  the  losses  sustained 
by  the  general  public,  which  they  took  advantage 
of,  they  garnered  in  the  coveted  securities  of 
their  competitors  at  bargain  prices.  The  follow- 
ing are  conspicuous  examples: 
<JF.  Augustus  Heinze,  the  competitor  of  the 
Standard  Oil  Amalgamated  Copper  Company, 
was  eliminated.  Charles  W.  Morse,  the  com- 
petitor of  J.  P.  Morgan  &  Co.  in  his  merger  of 


Panic  of  1907  147 

the  Atlantic  Coastwise  Steamer  Lines,  was  also 
eliminated. 

CJ  Tennessee  Coal  and  Iron,  the  competitor  of  J. 
P.  Morgan  &  Co.'s  billion-and-a-half  dollar 
U.  S.  Steel  Trust,  was  eliminated.  How  was  it 
done? 

If  Heinze  and  Morse  were  destroyed  as  competi- 
tors by  the  wrecking  of  what  was  known  as  the 
Heinze  and  the  Morse  banks — the  first  victim 
being  the  Knickerbocker  Trust  Company,  which 
later  proved  to  be  thoroughly  solvent. 
€f  Tennessee  Coal  and  Iron  was  destroyed  as  a 
competitor  by  the  all-powerful  banks  in  New 
York  promptly  refusing  to  continue  loans,  in  the 
midst  of  the  panic,  unless  the  bonds  of  the  U.  S. 
Steel  Trust  were  substituted  for  the  securities  of 
the  Tennessee  Coal  &  Iron  Company  held  by 
them  as  collateral. 

If  This  is  the  most  astounding  financial  transac- 
tion on  record  of  high  finance.  This  transaction 
was  put  over  the  President  of  the  United  States, 
and  not  one  dollar  changed  hands.  The  great 
and  only  competitor  of  the  Steel  Trust  was  ab- 
sorbed and  paid  for  with  the  securities  issued  by 
the  Steel  Trust — and  not  one  dollar  of  money 
put  in  the  banks  to  'check  the  panic. 
<JAs  there  was  nothing  in  the  physical  condi- 
tions of  the  country  to  cause  a  panic  at  this  time, 
and,  as  we  know,  the  dominating  money  in- 
terests in  New  York,  the  principals  in  this  con- 
spiracy, can  bring  on  a  money  panic  of  this  kind 
at  any  time,  it  is  only  necessary  to  apply  the  ordi- 
nary laws  of  evidence  as  applied  to  conspiracies 
and  look  for  the  motive,  and  then  proceed  to  find 
the  criminal.  In  this  panic  the  motive  is  plain, 
and,  as  conclusive  evidence  of  guilt,  we  find  the 
goods  in  the  possession  of  the  criminals. 


RESPONSIBILITY     RESTS     WITH     THE 

PEOPLE. 

IOTHING  will  ruin  the  country,"  said 
Webster,  "if  the  people  themselves 
will  undertake  its  safety:  nothing 
can  save  it,  if  they  leave  that  safety 
in  any  hands  but  their  own." 
€J  After  having  given  the  history  of 
money  the  most  careful  study  as  an  economic 
question,  and  familiarized  myself  with  all  the 
laws  enacted  by  Congress  upon  the  subject  of 
money,  currency,  and  National  banks,  and  hav- 
ing had  the  opportunity  to  study  at  close  range 
the  representatives  of  the  people  in  Congress 
here  in  Washington  for  the  last  thirty  years,  and 
owing  to  the  present  vital  importance  of  the 
money  question  now  as  an  issue  before  the 
voters,  I  deem  it  nothing  more  than  my  duty  to 
state  to  them  that  a  large  majority  of  their  repre- 
sentatives in  Congress  are  moral  cowards  on  this 
subject,  and  the  people,  in  justice  to  themselves, 
can  no  longer  leave  this  all-important  subject  to 
their  representatives. 

As  the  last  remarkable  evidence  of  such  action 
by  the  representatives  of  the  people  in  Congress, 
I  would  call  attention  to  the  fact  that,  after  hav- 
ing appropriated  over  $300,000  of  money  of  the 
taxpayers,  which  was  spent  by  the  National 
Monetary  Commission  to  investigate  the 
monetary  and  banking  systems  of  the  world,  a 
Bill  was  subsequently  presented  in  Congress  to 
"investigate  the  money  trust"  in  the  United 


Watch  Your  Representative  1 49 

States,  the  controlling  majority  in  the  House  of 
Representatives  held  a  caucus  on  this  bill  and  de- 
feated it  by  a  large  vote.  It  is  true  when  they 
heard  the  result  of  this  action  and  that  it  was  a 
political  mistake  that  jeopardized  them  individ- 
ually, they  moved  for  a  reconsideration  and 
passed  the  Bill  and  appointed  members  of  the 
Banking  and  Currency  Commission  whose  en- 
vironment was  that  of  the  moneyed  interest,  to 
do  the  investigating.  The  banks  refused  to  ac- 
knowledge the  power  of  Congress  to  have  this 
Committee  investigate  them.  A  Bill  was  passed 
by  the  House  May  26,  1912,  and  the  Senate  was 
asked  to  concur  in  granting  additional  power  to 
examine  the  banks  in  order  that  the  Committee 
might  continue  the  investigation. 
Cf  The  bill  was  referred  to  the  finance  committee 
of  the  Senate,  after  suppressing  it  for  several 
months.  This  committee  made  an  adverse  re- 
port, practically  saying  that  the  banks  should  not 
be  investigated.  This  conclusively  demon- 
strated that  the  most  important  committee  in 
Congress  is  still  dominated  by  the  money  power, 
previously  represented  by  John  Sherman  and 
Nelson  W.  Aldrich,  as  chairmen  of  the  Finance 
Committees  of  the  Senate. 

fj  Boies  Penrose,  the  boodler  of  Pennsylvania,  is 
now  the  chairman  of  this  finance  committee  of 
the  Senate  and  at  the  same  time  has  both  feet  in 
the  trough  of  the  Standard  Oil  Company  at 
Broadway,  New  York. 

ffOf  such  are  the  tools  of  the  builders  of  Na- 
tional Banks  of  Issue  and  the  Money  Trust  of  the 
United  States. 

IJ  Nelson  W.  Aldrich  was  a  Senator  and  also 
chairman  of  the  Finance  Committee,  drawing 


1 50  Vote  on  Money 

•» 

his  salary  from  the  taxpayers  of  the  country,  and 
retired  a  multi-millionaire.  He  is  an  understudy 
of  John  Sherman. 

€JIn  1854  John  Sherman  entered  Congress  a 
poor  man,  and,  when  subsequently  made  Chair- 
man of  the  Finance  Committee  of  the  Senate, 
betrayed  his  own  people  into  the  hands  of  for- 
eign bankers  and  their  agents  and  correspond- 
ents in  the  United  States.  While  in  the  Senate 
he  drew  his  salary  of  $6,000  a  year  from  the 
taxpayers  of  the  country,  lived  in  luxury,  and 
retired  worth  over  $3,000,000. 
CJ  The  Senate,  although  having  ample  time  after 
the  Finance  Committee  made  its  report,  ad- 
journed without  passing  this  bill.  The  result 
shows  that  although  they  could  appoint  a  Na- 
tional Monetary  Commission  in  the  interest  of 
banks,  and  authorize  the  expenditure  of  over 
$300,000  of  the  taxpayers'  money,  to  investigate 
foreign  banking  systems,  which  resulted  in  their 
recommending  the  present  money  trust  bill  now 
pending  in  Congress,  and  pass  another  bill  en- 
dorsing the  investigation  of  the  rural  credit  sys- 
tem of  banking  in  foreign  countries,  where  the 
people  have  been  reduced  to  hopeless  poverty, 
there  was  not  enough  manhood  or  moral  courage 
in  the  United  States  Senate  to  pass  a  bill  that  had 
been  forced  through  the  House  of  Representa- 
tives "to  investigate  the  Money  Trust"  in  the 
United  States,  in  order  that  the  people  might 
escape  from  its  oppressions. 
<J  I  urge  upon  all  voters  to  apply  this  crucial  test 
to  their  representatives  before  supporting  them. 
CJMake  them  commit  themselves  squarely  and 
unequivocally  to  these  questions.  Do  you  be- 
lieve Congress  should  exercise  its  sovereign 


Who  Is  the  Moral  Coward?  1 5 1 

power  as  provided  in  the  Constitution  of  the 
United  States  to  create  money  and  regulate  the 
value  thereof  and  control  the  circulating  medium 
in  the  interest  of  the  whole  people?  Or  do  you 
believe  this  sovereign  power  should  be  trans- 
ferred to  Banks  of  Issue? 

IJ  Their  answers  will  prove  conclusively  whether 
they  are  with  the  people  or  against  them. 
CJ  Or  do  you  believe  that  Banking  Corporations 
should  issue  a  credit  substitute  and  through  it 
control  the  money  and  circulating  medium  of 
exchange  of  the  people  of  the  United  States  in 
their  own  interest? 

€}  Watch  your  presidential  candidate  carefully 
and  see  that  he  commits  himself  clearly  on  this 
vital  question.  It  will  be  a  true  test  of  his  hon- 
esty and  fitness  for  the  office.  Admitted  igno- 
rance on  the  money  question  should  not  excuse 
him.  The  subject  is  as  old  as  our  Government, 
and  if  he  does  not  know  enough  about  it  now  to 
answer  these  test  questions,  he  is  not  qualified 
to  fill  the  position  he  aspires  to,  and  should  not 
ask  your  votes. 

C|[  If  he  is  unwilling  to  commit  himself  before 
election,  he  would  be  able,  after  becoming  Pres- 
ident of  the  United  States,  to  fall  in  line  with  the 
great  banking  and  corporate  influences  that  have 
controlled  the  finances  and  business  of  the  coun- 
try up  to  the  present  time,  and  enable  them  to 
enact  into  law  the  Morgan-Rothschild-Aldrich- 
Bankers  Bill  now  pending  in  Congress;  or  a  bill 
based  upon  the  same  principles,  which  would 
make  permanent  the  absolute  control  of  all  the 
business  of  the  people  of  this  country  by  a 
gigantic  money  trust. 


THE  REMEDY. 

BILL  to  establish  a  monetary  and 
banking  system  to  conform  to  the 
Constitution  of  the  United  States. 
€JBe  it  enacted  by  the  Senate  and 
House  of  Representatives  of  the 
United  States  of  America  in  Congress  assem- 
bled, That  there  shall  be  established  at 
Washington,  District  of  Columbia,  the  Capi- 
tal of  the  United  States,  a  Government  bank  of 
the  United  States.  The  Government  of  the 
United  States  shall  deposit  its  cash  balance  with 
the  Government  bank  of  the  United  States,  and 
thereafter  all  receipts  of  the  Government  shall 
be  deposited  with  the  Government  bank  of  the 
United  States,  except,  that  when  necessary,  the 
Government  bank  may  designate  other  banks 
for  that  purpose  in  cities  where  there  is  no 
branch  of  the  Government  bank  of  the  United 
States.  All  disbursements  by  the  Government 
shall  be  made  through  the  Government  bank  of 
the  United  States. 

(f  Sec.  2.  The  Government  bank  of  the  United 
States  and  its  branches  shall  pay  no  interest  on 
deposits. 


An  American  Money-System  1  53 

Cf  Sec.  3.  The  Government  bank  of  the  United 
States  may  rediscount,  for  any  bank  having  a 
deposit  with  it,  notes  and  bills  of  exchange 
arising  out  of  commercial  transactions  and  hav- 
ing two  commercial  signatures — those  of  drawer 
and  drawee — with  the  additional  indorsement 
of  the  bank.  This  privilege  is  also  granted  to  in- 
dividuals on  notes  and  bills  of  exchange  arising 
out  of  commercial  transactions  having  three 
commercial  signatures,  those  of  drawer,  drawee, 
and  indorser.  In  place  of  one  of  these  signatures, 
however,  stocks  or  bonds  may  be  deposited  as 
security,  upon  which  interest  or  dividends  have 
been  paid  consecutively  for  a  period  of  not  less 
than  five  years  and  a  statement  of  the  physical 
valuation  of  the  property  upon  which  they  are 
issued  shall  be  filed  with  the  Government  Bank 
of  the  United  States. 

CJThis  shall  apply  to  all  notes  and  bills  of  ex- 
change issued  or  drawn  for  commercial,  agricul- 
tural, or  industrial  purposes,  and  under  no  cir- 
cumstances for  carrying  stocks,  bonds,  or  other 
securities  for  speculative  investments. 
CJSec.  4.  The  Government  Bank  of  the  United 
States  shall  collect  checks  or  bills  of  exchange 
payable  in  foreign  countries  for  banks  and  in- 
dividuals in  the  United  States  at  a  minimum 
cost.  These  bills  of  exchange  must  bear  the 


1 54  The  Remedy 

name  of  two  or  more  responsible  parties.  It 
shall  be  the  duty  of  the  Government  Bank  of 
the  United  States  or  any  of  its  branches,  upon 
request,  to  transfer  any  part  of  the  deposit  bal- 
ance of  any  bank  having  an  account  with  them 
without  cost. 

CJSec.  5.  The  Government  Bank  of  the  United 
States  and  its  branches  shall  at  once,  upon  ap- 
plication and  without  charge  for  transportation, 
forward  its  circulating  notes  to  any  depositing 
bank  against  its  credit  balance. 

Note  Issues. 

^j  Sec.  6.  There  shall  be  no  further  issue  of  cir- 
culating notes  by  any  national  bank  beyond  the 
amount  now  outstanding.  The  Government 
Bank  of  the  United  States  will  offer  to  purchase 
at  a  price  not  less  than  par  and  accrued  interest 
the  2  per  cent  bonds  held  by  national  banks  and 
deposited  to  secure  their  circulating  notes.  The 
Government  Bank  of  the  United  States  shall 
take  over  these  bonds  and  assume  responsibility 
for  their  cancellation  (upon  presentation)  of  the 
outstanding  notes  secured  thereby.  The  Govern- 
ment Bank  of  the  United  States  shall  issue,  on 
the  terms  herein  provided,  its  full  legal-tender 
notes,  lawful  money  of  the  United  States,  as  fast 
as  the  outstanding  notes  secured  by  such  bonds, 


An  American  Money-System  1  55 

so  held,  shall  be  presented  for  redemption,  and 
may  issue  other  notes  from  time  to  time  to  meet 
business  requirements,  it  now  being  the  policy 
of  the  United  States  to  retire  as  rapidly  as  possi- 
ble, consistent  with  the  public  interests,  bond- 
secured  circulation,  and  to  substitute  therefor 
real  lawful  money  of  the  United  States  in  place 
of  banks  of  issue  promises  to  pay — credit  money. 
All  notes  issued  by  the  Government  Bank  of  the 
United  States  shall  be  full  legal  tender  and  pay- 
able for  all  debts,  public  and  private,  and  consti- 
tute a  first  lien  upon  all  the  assets  and  services  of 
the  people  of  the  United  States  for  their  redemp- 
tion. ! 

IJSec.  7.  The  governor  of  the  Government 
Bank  of  the  United  States  shall  be  appointed  by 
the  President  of  the  United  States  and  confirmed 
by  a  two-thirds  vote  of  Congress. 
CJ  Recognizing  the  sovereignty  and  equality  of 
the  States,  each  shall  be  entitled  to  a  director  in 
the  Government  Bank  of  the  United  States,  ap- 
pointed by  the  governor  of  the  State  and  to  be 
confirmed  by  a  two-thirds  vote  of  the  legislature 
thereof. 

(f  Sec.  8.  There  shall  be  a  rigid  inspection  of  all 
banks  and  a  full  report  of  their  condition  made 
and  the  character  of  business  transacted,  before 
being  allowed  to  deposit  for  rediscount  any  of 


156  The  Remedy 

their  paper  with  the  Government  Bank  of  the 
United  States  or  any  of  its  branches. 
(f  Sec.  9.  There  shall  be  a  branch  of  the  Govern- 
ment Bank  established  in  every  important  city 
in  each  State,  and  the  rate  of  interest  shall  be 
uniform  throughout  the  United  States.  To  put 
the  people  of  the  United  States  on  the  same 
working  basis  as  those  of  France,  England,  and 
Germany  the  rate  should  not  exceed  4  per  cent. 
The  manager  of  each  branch  of  the  Government 
Bank  of  the  United  States  shall  be  assisted  by  a 
local  board  of  directors,  selected  from  among 
the  best  qualified  commercial,  agricultural,  and 
industrial  representatives  in  the  region.  No 
officer  or  director  of  the  Government  Bank  of 
the  United  States,  or  its  branches,  shall  be  al- 
lowed to  borrow  from  same,  but  shall  receive  a 
fixed  compensation  for  his  services,  and  be  a 
bonded  officer. 

<J  Sec.  10.  The  Government  Bank  of  the  United 
States  shall  be  restricted  in  loans  on  collateral  to 
approved  railroad,  municipal,  telegraph,  and 
telephone  bonds,  upon  which  interest  has  been 
reguarly  paid  out  of  its  earnings  for  a  period  of 
not  less  than  five  years  and  a  full  statement 
showing  the  real  physical  valuation  of  the  prop- 
erty upon  which  these  are  issued  shall  be  filed 
with  the  Government  Bank  of  the  United  States. 
A  margin  of  not  less  than  25  per  cent  shall  be 


An  American  Money-System  1  57 

required  on  all  such  securities,  upon  which  the 
Government  Bank  of  the  United  States  is  author- 
ized to  lend. 

If  Sec.  11.  It  is  further  provided  that  the  Gov- 
ernment Bank  and  its  branches  be  empowered 
to  lend  money  upon  approved  farms  in  the 
United  States  at  not  more  than  50  per  cent  of 
their  value  and  at  a  rate  of  interest  not  exceeding 
5  per  cent,  and  that  the  Postal  Savings  Banks 
may  be  also  utilized  to  this  end. 
tJSec.  12.  The  earnings  of  the  Government 
Bank  from  all  sources,  after  paying  the  con- 
servative and  legitimate  expenses  of  the  bank 
and  its  branches,  shall  be  applied  to  the  payment 
of  the  general  expenses  of  the  Government,  thus 
reducing  the  taxation  upon  the  people  of  the 
United  States. 

(f  Sec.  13.  And  be  it  further  enacted,  That  all 
the  money  heretofore  issued  by  the  Secretary  of 
the  Treasury  of  the  United  States,  authorized  by 
acts  of  Congress,  shall  be  substituted  by  lawful, 
full  legal  tender  money  of  the  United  States, 
thus  destroying  forever  the  operation  of  the  end- 
less-chain process  upon  the  United  States  Treas- 
ury. 

fJSec.  14.  No  banking  or  financial  institution 
underwriting  industrial  stocks  or  bonds  of  a 
speculative  character  or  lending  money  thereon 
shall  become  a  depositor,  borrower,  or  redis- 
count any  of  its  securities,  directly  or  indirectly, 


1 58  The  Remedy 

with  the  Government  Bank  of  the  United  States 
or  its  branches. 

tJSec.  15.  No  banking  institution  allowing  its 
officers,  directors,  or  stockholders  to  use  the  de- 
posits of  the  bank  for  private  profit,  directly  or 
indirectly,  or  through  the  co-operation  of  others 
for  like  purpose,  shall  be  allowed  to  open  an 
account  or  rediscount  any  of  its  paper,  directly 
or  indirectly,  with  the  Government  Bank  of  the 
United  States  or  any  of  its  branches. 
Cf  Sec.  16.  It  will  be  the  policy  of  the  Govern- 
ment Bank  and  its  branches  to  discriminate 
against  those  banking  and  financial  institutions 
carrying  demand  loans  against  their  borrowers. 
Cf  Sec.  17.  And  whereas  upon  the  demonetiza- 
tion of  gold,  which  must  come  to  pass,  the  United 
States  stands  now  to  be  the  greatest  loser,  as  is 
shown  by  the  following  figures: 

Gold  coin  in  United  States 

Treasury  Dec.  1,  1911 .  .  $1,000,823,215.00 
Gold  bullion  in  United 

States  Treasury  Dec.  1, 

1911 .  183,332,234.00 

Gold  coin  in  banks  and  in 

circulation    613,465,602.00 


$1,797,621,051.00 
Net  exports  United  States 
gold  coin  June  30,  1911, 
to  be  redeemed 787,837,314.00 


$2,585,458,365.00 


An  American  Money-System  1  59 

Real  metal  value  50  cents 
on  the  dollar;  loss  to  the 
people  of  the  United 
States 1,292,729,182.50 

€J  Sec.  18.  It  is  therefore  further  enacted  that  no 
more  gold  shall  be  coined  into  American  dollars 
by  the  United  States. 

If  Sec.  19.  In  order  that  there  may  be  a  steady 
and  normal  increase  of  real  money  into  the 
money  system  of  the  United  States  to  keep  pace 
with  the  increase  of  population  and  national 
wealth,  the  Government  Bank  of  the  United 
States  is  authorized  to  issue  an  annual  increase 
of  3  per  cent  of  lawful  money  of  the  United 
States,  same  to  be  used  and  paid  out  as  is  the 
money  now  received  from  the  taxes  of  the 
people. 

€f  Sec.  20.  The  above  percentage  of  annual  in- 
crease of  the  money  of  the  United  States  shall 
not  be  changed  without  six  months'  notice  in  the 
paper  having  the  largest  circulation  in  each  city 
of  the  United  States  and  by  a  two-thirds  vote  of 
the  ensuing  Congress. 

CJ  Sec.  2 1 .  The  Government  Bank  of  the  Uuited 
States  shall  have  the  power  to  issue  emergency 
currency  in  case  of  threatened  panic  only,  and 
shall  retire  same  as  soon  as  justified. 
fij  Sec.  22.  That  no  banking  or  other  corporation 
or  association  of  men  shall  be  allowed  to  issue 
any  kind  of  money,  currency,  or  any  credit  sub- 
stitute for  same. 


160 

Effects  of  the  Bill. 

<|  1  st.  Free  the  Government  and  the  people  of 
the  United  States  from  the  domination  of  the 
money  power  by  taking  the  control  of  the 
money  of  the  country  out  of  the  hands  of  bank- 
ing corporations  and  restoring  its  control  to  the 
Government  to  be  exercised  in  the  interest  of  the 
whole  people. 

€J  2nd.  Enable  the  people  to  always  get  the  use 
of  money  in  legitimate  business  at  a  reasonable 
and  uniform  rate  of  interest.  The  market  rate 
being  fixed  by  the  Government  Bank,  all  private 
banking  corporations  would  have  to  meet  this 
competition,  the  effect  has  been  well  described 
by  the  Governor  of  the  Bank  of  France.  "On 
certain  points  there  may  be  competition,  and  it 
is  on  account  of  this  salutary  competition,  that 
wherever  a  branch  of  the  bank  has  been  estab- 
lished the  rate  of  discount  has  been  perceptibly 
reduced  in  the  interest  of  commerce." 
^f3rd.  Prevent  money  panics  and  contractions 
of  the  currency.  There  would  be  no  occasion 
for  a  money  panic  as  all  solvent  banks  doing  a 
legitimate  business  could  rediscount  their  paper 
at  the  Government  Bank  and  get  the  cash  when 
needed. 

€JThe  Government  Bank  would  thus  be  the 
supreme  resource,  not  only  of  the  banks,  but  of 
the  people  in  time  of  need  and  thus  prevent  a 
contraction  of  the  circulating  medium  of  ex- 
change, the  sole  cause  of  panics. 
€J4th.  Redeem  United  States  bonds,  thus  pay- 
ing off  the  national  debt  by  substituting  lawful, 
full  legal-tender  money  for  the  present  panic- 
breeding  credit  money  issued  by  the  National 


Reasonable  Rate  of  Interest  161 

Banks,  thus  saving  the  taxpayers  $7 1  1 ,099,- 
938.00  principal  and  $21,332,998.00  annually 
in  interest,  which,  under  the  money  trust  bill 
now  pending  in  Congress,  would  run  for  fifty 
years  at  3  per  cent,  amounting  in  principal  and 
interest  to  the  enormous  sum  of  $3,151,626,- 
000.00  to  be  paid  by  the  taxpayers. 
CJ5th.  Increase  real  producers  and  decrease 
non-producers  by  the  restrictions  imposed  by 
the  Government  Bank,  in  refusing  as  security 
for  loans,  bonds  and  stocks  not  earning  interest 
and  dividends  and  not  giving  physical  valuation 
of  properties  upon  which  secured.  Refusing  to 
do  business  with  banking  institutions  under- 
writing industrial  stock  or  bond  operations  and 
the  loaning  of  money  to  non-producers,  gam- 
blers and  parasites  on  such  securities,  thus  pre- 
venting the  manufacture  of  artificial  debts  upon 
the  people. 

€][  Money  would  then  go  into  legitimate  and  pro- 
ductive enterprises,  thus  increasing  real  pro- 
ducers and  decreasing  non-producers. 
€JGive  immediate  relief  and  encouragement  to 
the  agricultural  interests,  increase  the  demand 
for  farm  lands,  multiply  individual  homes  of 
real  producers,  increase  the  food  supply,  and  re- 
duce the  high  cost  of  living. 

€J6th.  It  will  stop  the  manufacturing  of  arti- 
ficial debts  upon  the  great  industrial  and  com- 
mercial enterprises  of  the  United  States. 
€J7th.  Stop  trust  combination  and  inflated 
stock  operations.  It  would  keep  bankers  from 
going  into  partnership  with  the  promoter  to 
participate  in  the  profits  of  the  underwriting  of 
such  securities,  as  no  legitimate  banking  insti- 
tution could  accept  them  as  securities  for  loans. 


1 62  Reduce  Taxation 

€J8th.  Do  away  with  the  present  useless  and 
pernicious  bank  reserves  and  keep  this  money  in 
circulation  among  the  people  in  the  communi- 
ties where  it  belongs.  For  any  bank  complying 
with  the  requirements  of  the  Government  Bank 
of  the  United  States,  when  it  needed  cash,  could 
obtain  it  from  the  Government  Bank  by  re- 
discount of  its  paper. 

CJThis  Bill  will  make  it  unnecessary  for  the 
United  States  to  coin  a  gold  metal,  that  under 
the  operation  of  the  great  natural  law  of  de- 
mand and  supply  is  not  worth  more  than  50 
cents,  into  an  American  Dollar  worth  1 00  cents. 
If  foreign  countries  are  ignorant  enough  to  take 
gold  from  us  at  its  present  value  we  would  be 
very  fortunate  indeed  in  letting  them  have  it,  as 
full  legal  tender  money  could  be  issued  in  its 
place,  and  the  people  of  the  United  States  make 
the  profit. 

tj  Answering  the  howl  that  will  go  up  from  these 
banking  and  trust  promoters  "that  the  Govern- 
ment should  not  go  into  the  banking  business 
and  compete  with  private  banking  corporations, 
and  that  a  failure  will  be  the  result,"  will  refer 
to  France,  which  has  the  only  Government-con- 
trolled bank  in  the  world  (whose  assets  are 
$1 , 128,223,555),  and  if  the  French  Government 
owned  the  Bank  of  France  it  would  be  far  better. 
As  it  is,  France  has  not  had  a  panic  for  50  years, 
and  the  people  permanently  enjoy  a  uniform 
and  low  rate  of  interest.  This  is  the  testimony 
of  its  largest  rival  in  banking  business,  The 
Credit  Lyonnais,  with  assets  of  $415,964,134. 
€JThis  bank  is  organized  subject  to  the  law  of 
joint-stock  companies  and  enjoys  no  special  con- 
cession. 


Prevent  Money  Panics  1 63 

Interview  in  1910 — Baron  Brincard. 

Q.  Do  you  find  the  Bank  of  France  com- 
petes with  you  in  any  way? — A.  No. 

Q.  They  receive  accounts  from  individuals 
and  small  tradesmen  in  the  branches,  do  they 
not? — A.  Yes;  but  they  do  not  grant  uncov- 
ered credits.  There  is  no  competition  between 
the  Bank  of  France  and  the  other  banks,  be- 
cause they  do  not  do  the  same  kind  of  busi- 
ness. The  Bank  of  France  receives  deposits, 
but  does  not  allow  interest  upon  them;  it  only 
discounts  bills  with  three  signatures;  it  is  the 
banker's  bank;  it  acts  as  the  regulator  of  the 
money  market. 

Q.  For  loans  on  collateral  the  Bank  of 
France  only  accepts  certain  classes  of  securi- 
ties, and  all  other  classes  of  securities  are  left 
for  the  other  banks? — A.  The  Bank  of  France 
is  quite  impartial;  it  gives  no  preference  to 
anyone;  there  is  no  favoritism. 

Q.  Have  there  been  any  suggestions  of 
change  in  the  system  of  the  Bank  of  France, 
or  is  it  regarded  as  satisfactory? — A.  We  re- 
gard it  as  the  best  system  in  the  world. 

Q.  What  would  you  say  are  the  particular 
functions  of  the  Bank  of  France  aside  from 
the  note  issue? — A.  It  regulates  the  rate  of 
discount  and  in  the  exercise  of  its  functions 
it  automatically  distributes  the  money  in  the 
country  where  it  is  required,  and  this  role  is 
perhaps  as  important  as  that  of  regulating  the 
rate  of  discount.  The  Bank  of  France  dis- 
counts bills  in  every  part  of  the  country,  and 
gives  notes,  gold,  and  silver  in  the  propor- 
tions that  they  are  wanted  in  every  part  of  the 


1  64  Bank  of  France 

country.  It  is  the  public  itself  which  indicates 
the  distribution  of  the  money  in  France  by 
presenting  bills  for  discount,  and  by  asking 
the  Bank  of  France  for  the  kind  of  money  it 
needs,  and  turning  in  the  kinds  it  does  not 
need. 

Q.  The  elasticity  in  your  system  is  fur- 
nished by  the  note  issue  of  the  Bank  of 
France? — A.  Yes;  the  Bank  of  France  is  the 
basis  of  our  banking  system  and  for  banks  to 
rediscount.  Its  organization  presents  a  maxi- 
mum of  safety. 

Testimony  of  M.  Pallain,  Governor  of  the  Bank 

of  France. 

Q.  You  admit  to  discount  certain  classes  of 
bills  which  are  also  discounted  by  the  other 
banks,  and  with  whom  the  Bank  of  France 
must  therefore  find  itself  in  competition? — A. 
On  certain  points  there  may  be  competition, 
and  it  is  on  account  of  this  salutary  competi- 
tion that  wherever  a  branch  of  the  bank  has 
been  established  the  rate  of  discount  has  been 
perceptibly  reduced  in  the  interest  of  com- 
merce. 

Q.  Is  the  rate  of  discount  at  all  times  the 
same  at  the  Central  Bank  and  at  the 
branches? — A.  Yes. 

Q.  Does  the  Bank  of  France  make  the 
same  charge  for  discount  of  bills  and  for  loans 
on  collateral? — A.  The  bank  usually  charges 
somewhat  more  for  loans  upon  collateral  than 
for  discount  of  bills.  The  rates  at  present  are 
3  per  cent  and  4  per  cent,  respectively. 


Low  Rate  of  Interest  1  65 

Q.  Are  you  restricted  in  the  classes  of  se- 
curities on  which  you  may  make  advances? — 
A.  Securities  which  may  be  admitted  as  col- 
lateral are  limited  by  law  and  decrees  which 
govern  the  bank  and  include  collateral  of  easy 
conversion  into  cash,  such  as  should  at  all 
times  be  required  by  a  bank  of  issue.  These 
securities  are  generally  guaranteed  by  the 
state,  the  departments,  municipalities,  or 
French  colonies. 

Q.  Do  the  banks  rely  implicitly  on  the 
Bank  of  France  to  grant  them  credit  when 
they  require  it? — A.  They  know  very  well 
that  in  time  of  difficulty  we  are  the  supreme 
resource. 

Q.  How  is  your  note  issue  limited? — A. 
The  maximum  note  issue  at  present  author- 
ized is  5,800,000,000  francs.  The  actual  note 
issue  on  August,  1910,  was  4,600,000,000 
francs. 

Q.  In  other  words,  the  bank  seeks  to  reg- 
ulate the  amount  of  its  note  issue  by  the  de- 
mands of  business  ? — A.  By  virtue  of  the  stat- 
utory machinery  the  emissions  of  the  bank  are 
essentially  variable  and  are  commanded  pre- 
cisely by  the  discount  or  loan  operations.  It 
is,  therefore,  the  bills  presented  for  discount 
and  the  requests  for  loans — that  is  to  say,  re- 
quirements of  business  —  which  fix  the 
amount  of  the  issue. 

A.  The  stability  and  the  moderation  of  the 
rate  of  discount  are  considered  as  precious  ad- 
vantages, which  the  French  market  owes  to 
the  organization  and  traditional  conduct  of 
the  Bank  of  France. 


1  66  To  the  Producers 

Q.  Do  you  think  that  it  would,  perhaps,  be 
more  advantageous  for  the  Bank  of  France, 
considered  simply  as  a  bank,  to  impose  differ- 
ent rates  under  different  circumstances  at  dif- 
ferent places? — A.  As  a  banking  establish- 
ment, if  we  thought  it  advisable  to  apply  dif- 
ferent rates,  we  could  easily  become  the  mas- 
ters of  the  market.  But  in  our  position  of 
Bank  of  France,  organized  to  serve  the  in- 
terest of  public  credit  in  a  democratic  country, 
we  do  not  believe  ourselves  justified  to  use  this 
option. 

€JIt  has  been  demonstrated  in  Daniel  on  Real 
Money  that  there  is  no  such  thing  as  a  Gold 
Standard  and  that  gold  is  a  handicap  instead  of 
a  help  in  international  trade.  In  fact  it  is  con- 
clusively shown  that  the  so-called  gold  standard 
is  a  monumental  fraud  perpetrated  by  the  money 
lenders  on  the  unsuspecting  people  of  the  coun- 
try because  of  their  heretofore  ignorance  on  the 
subject. 

<|  England  adheres  to  the  so-called  gold  stand- 
ard as  it  enables  her  to  sell  to  the  outside  world 
her  annual  output  taken  from  her  South  Ameri- 
can gold  mines  amounting  to  $261,372,389.00, 
not  worth  more  than  50  cents  on  the  dollar, 
thus  yielding  her  a  profit  of  $130,686,195.00 
annually.  England  keeps  little  of  this  gold  her- 
self, but  unloads  it  on  other  countries.  In  the  last 
report  of  the  Director  of  the  Mint,  1  9 1  1 ,  the  f ol- 
lowing  statement  is  made:  "The  two  countries 
of  Europe  which  made  the  greatest  industrial 
progress  during  this  period  (the  last  ten  years) 
were  unquestionably  the  United  Kingdom 
and  Germany,  and  of  the  $863,000,000— of 


England  Unloading  Gold  1 67 

gold — distributed  to  all  European  Banks  of 
Issue,  these  two  which  hold  the  final  reserves  of 
money  and  credit  for  these  countries,  secured 
less  than  $60,000,000. 

^f  An  examination  shows  that  England,  now  sup- 
posed to  dominate  the  world  on  a  gold  basis — 
and  owning  more  gold  mines  than  any  other 
country — has  been  getting  rid  of  it  as  fast  as 
possible,  and  during  this  period  of  ten  years 
her  banks  have  added  only  $  1 0,000,000  to  their 
reserves. 

CJAs  long  as  the  United  States  remains  on  the 
so-called  gold  basis  and  Europe  holds  enough 
American  securities  to  withdraw  the  gold,  this 
great  country  and  its  business  will  remain  at 
the  mercy  of  the  European  money-lenders. 
On  the  other  hand,  if  the  United  States  would 
assert  its  overpowering  importance  over  these 
practically  bankrupt  European  countries  and 
put  its  National  wealth  back  of  the  full  legal 
tender  American  dollar  and  use  properly  its 
balance  of  trade  against  them,  it  would  become 
at  once  the  dominating  money  center  of  the 
world. 

Instead  of  an  American  Money  System  Domi- 
nating the  World,  We  Have  the  Present 
Financial  Death  Trap. 

<JThe  economic  condition  of  the  people  of  the 
world  and  their  suffering  are  written  in  the  his- 
tory of  money.  From  the  beginning  of  civiliza- 
tion it  has  been  the  ruling  force  and  the  main  ob- 
ject of  men;  for  since  barter  was  substituted  by 
money,  the  medium  of  exchange,  men  must  first 
have  money  in  order  to  get  the  things  they  de- 


1 68  Our  Financial 

sire;  hence  universal  demand  falls  upon  money, 
therefore  money  is  the  most  important  economic 
factor  in  the  business  life  of  the  people  of  the 
world. 

€JThe  United  States  made  a  new  and  correct  de- 
parture in  its  form  of  government,  and  it  should 
also  have  established  a  new  and  correct  mone- 
tary system  in  accord  with  its  Constitution, 
whereby  the  people  could  have  accumulated  un- 
mortgaged National  wealth,  acquired  property 
and  paid  off  their  debts  and  become  a  really  in- 
dependent people.  But  before  the  smoke  of  bat- 
tle of  the  Civil  War  had  cleared  away,  the  for- 
eign money  powers  fastened  upon  this  new  Re- 
public the  Bank  of  England  money  scheme, 

'Banks  of  Issue"  and  gold  redemption  of  credit 
money.  Their  agents — American  bankers — co- 
operating with  them,  established  this  monetary 
and  banking  system,  with  the  intelligent,  delib- 
erate and  definite  purpose  to  exploit  and  finan- 
cially enslave  the  people  of  this  Western  Hemis- 
phere by  manufacturing  debts,  National,  Cor- 
porate, and  Individual,  upon  the  people. 

The  Precarious  Condition  of  the  Property  and 
Helplessness  of  the  People  Under  Present 
Money  System. 

€J  Total  amount  of  all  kinds  of  money  in  the  cur- 
rency system  of  the  United  States,  June  1  1  th, 
191  1— $3,214,000,000.  Deduct  25  percent  for 
the  bank  reserves.  That  might  as  well  be  at  the 
bottom  of  the  ocean  so  far  as  the  people  are  con- 
cerned,—this  would  leave  $2,4 1 0,500,000.  Upon 
this  amount  of  available  currency  the  Banks 
have  made  investments  in  Bonds,  Stocks  and 
other  Securities  amounting  to  $5,051,900,000. 


Death  Trap  1 69 

Above  this  they  have  loaned  bank  credits  to  the 
borrowers,  until  the  total  discounts  and  loans 
amount  to  $13,046,000,000.  To  sum  up,  the 
Banks  have  demand  loans  against  the  people 
amounting  to  $2,600,060,760,  and  loans  becom- 
ing due  amounting  to  $10,626,500,000. 
<}  It  can  be  readily  seen  that  the  largest  part  of 
this  $13,046,000,000— loaned  the  people,  was 
not  money,  but  the  credits  of  the  Banks,  upon 
which  they  earn  interest,  yet  the  borrowers  have 
to  make  payment  in  money.  Now  add  to  this 
the  fact  that  the  so-called  National  Banks  have 
issued  into  this  currency  system  $739,165,313 
of  their  bank  notes,  which  they  can  call  in  at  any 
time,  and  the  machinery  of  this  financial  death 
trap  against  the  borrowers  and  the  property  of 
the  people  is  complete  and  ready  for  action  at 
any  time. 

€JA  panic  circular,  sent  out  by  the  American 
Bankers'  Association,  directing  the  banks  to 
withdraw  their  note  circulation  and  call  in  loans 
can  always  produce  a  panic.  It  is  equivalent  to 
directing  the  banks  to  contract  the  currency, 
make  dollars  difficult  for  the  people  to  get,  and 
demand  that  the  borrowers  pay  their  debts  in 
money — when  manufactured  by  bank  credits — 
at  the  very  time  they  have  made  it  impossible  for 
the  borrower  to  get  money,  having  withdrawn 
it  themselves  from  circulation. 

Power  of  this  Financial  Death  Trap  Over  the 

People. 

<|  To  drive  down  the  value  of  property  or  securi- 
ties in  order  to  buy  them  in. 
€|To  bring  on  a  panic  and  business  depression 


1  70  Our  Financial 

to  force  legislation  favorable  to  them  through 
Congress. 

CjfTo  discredit  an  Administration  antagonistic 
to  their  financial  and  business  operations. 
<|To  bring  down  the  general  level  of  all  prices 
and  destroy  the  equity  in  the  property  of  the 
people,  so  that  the  holder  of  the  mortgage  will 
own  the  property. 

tJTo  make  the  rich  richer  and  the  poor  poorer. 
<f  It  is  only  necessary  for  the  American  Bankers' 
Association  to  notify  its  members  to  withdraw 
£  of  its  circulation,  call  in  £  of  their  loans,  and 
this  financial  death's  trap  has  closed  upon  its 
helpless  victim  in  every  state. 
^f  All  the  activities  of  the  people  are  paralyzed 
by  the  contraction  of  the  life  fluid  of  business. 
Debtors  become  cowards  and  supplicants  and 
cry  for  help.  Its  blighting  influence  is  felt  di- 
rectly or  indirectly  in  every  home  and  hamlet  in 
this  Country. 

C|  As  a  result  of  establishing  Banks  of  Issue  and 
the  gold  basis  swindle  in  the  United  States,  the 
interest  and  dividends  upon  manufactured  debts 
is  absorbing  the  net  proceeds  of  labor  and  thus 
prevents  the  people  from  ever  ridding  them- 
selves of  the  bondage  of  debts. 
<J  A  money  system  which  caused  the  rich  to 
grow  richer  and  the  poor  to  grow  poorer  can  be 
advocated  only  by  an  enemy  of  the  human 
family. 

€J  The  effect  of  the  present  dishonest  and  fraudu- 
lent money  system  is  to  impoverish  and  destroy 
that  great  and  honest  middle  class  of  moderate 
means  that  stand  between  those  in  want  and 
revolution. 
€JTo  make  the  rich  richer  and  the  poor  poorer, 


Death  Trap  171 

is  the  greatest  crime  that  can  be  perpetrated 
against  a  people ;  it  not  only  takes  from  the  poor 
the  dire  necessities  of  their  lives,  but  destroys 
their  moral  well  being  and  brings  about  a  deg- 
radation that  drives  from  their  souls  the  image 
of  their  Creator. 

€J  Having  traced  this  gold  basis  swindle  from 
its  origin  in  the  Bank  of  England  and  the  trea- 
sonable methods  by  which  laws  were  passed 
through  Congress,  imposing  it  on  the  United 
States,  resulting  in  the  all-powerful  control  over 
the  business  of  the  people  exercised  through  the 
machinery  of  the  present  money  power,  and 
having  given  the  remedy,  I  call  upon  American 
manhood  to  assert  itself  and  do  away  with  this 
gold  basis  credit  money  system,  establish  prop- 
erty as  the  thing  of  value,  money  as  the  medium 
of  exchange,  make  man  the  master  above  the 
dollar,  free  the  people  from  financial  bondage 
and  save  this  Republic. 


Arrangements  have  been  completed  to 
prosecute  the  sale  of  these  Books  in  every 
Congressional  District  in  the  Union. 


Copies  of 

"High  Cost  of  Living" 

Cause — Remedy 

have  been  delivered  to  the  late  Presidential 
Candidates,  to  the  Governors  of  every  State 
and  Territory  in  the  Union,  to  every  member 
of  Congress  and  to  each  of  the  Judges  of 
the  Supreme  Court  of  the  United  States. 


Copies  of  Daniel  on  "Real  Money"  were 
sent  on  the  following  date  to 

W^ 
April,  1911  jjc  rJu     Woodrow  Wilson 

\       0  JS  Theodore  Roosevelt 

'^  XV^  ^T  William  H.  Taft 

(/    a/  V>  William  J.  Bryan 

\\e/     ^  j^  O  *  Robert  M.  La  Follette 

\   ^  <gT  cfe  -  Champ  Clark 

<9>   \y  v.0^  9}r  ^t  °5Cafr  W-  Underwood 

VO        N         .  y      ,^ 
*  ^  ^          °V 


DANIEL  ON  REAL  MONEY 

WASHINGTON,  D.  C. 


The  Author  has  so  elucidated  this,  apparently  difficult  subject,  that 

it  is  now  criminal  negligence  for  any  one  not  to  understand  it,  in 

order  that  he  may  protect  himself,  his  family  and  his  country. 


INDEX 

PAGE 

The  Present  Banking  System 9 

The  Present  Banking  System  and  Stock  Gambling 35 

Wall  Street — Gold  Movement  and  Money  Market 39 

Statements  before  the  Banking  and  Currency  Committee  of  the 

Sixtieth  Congress,  Including  Statement  of  T.  C.  Daniel 52 

J.  P.  Morgan  &  Co.,  August  Belmont  &  Co.,  and  Messrs.  N.  M. 
Rothschild  &  Sons,  London,  England,  vs.  The  United  States 

Treasury 109 

Hearing  before  the  United  States  Interstate  Commerce  Commis- 
sion  119 

A  Warning  to  the  United  States 147 

Present  Money  System  and  So-called  Bankers  Responsible 159 

President  Taft  and  Gold 161 

Greenbacks,  the  Worn-out  Hobby  of  the  Gold  Monometallist 166 

Exchange:  Domestic  Exchange;  Foreign  Exchange 170 

Goschen  on  Exchange 175 

Balance  of  Trade 180 

The  Bank  of  England 184 

Central  Bank  of  Issue 192 

A  True  Definition  of  Money 214 

Gold,  the  False  Basis  of  Credit  Money,  Annihilated  by  the 
Logic  of  Common  Sense ;  Correct  Definition  of  a  Standard_230 

The  Proper  Money  System 254 

It  is  for  America,  with  Her  Robust,  Enterprising,  and  Higher 
Civilization  of  the  Twentieth  Century,  to  Establish  a  Proper 
Money  System - — 266 


The  Constitution  of  the  United  States  provides  that  Congress, 
which  means  the  people,  shall  have  the  right  to  create  money  and 
regulate  the  value  thereof. 

Shall  this  sovereign  right  to  create,  issue  and  control  money,  the 
most  important  factor  in  the  welfare  of  the  human  family,  the  meas- 
uring medium  of  the  value  of  all  services  for  hire,  and  property  of 
all  the  people,  be  transferred  to  Banking  Corporations  or  a  Money 
Trust? 

This  is  the  most  vital  question  to  be  answered  by  the  voters  of 
this  Country. 


B°o*is 


?<* 


S^sflgas* 


-7/37 


U.C.  BERKELEY  LIBRARIES 


3% 

UNIVERSITY  OF  CALIFORNIA  LIBRARY 


